Many businesses have been feeling the sting of unprecedented economic change since 2020 for reasons I don’t need to elaborate on. By now, we all understand the toll these past couple of years has taken on a broad range of companies, across a multitude of markets and industries. Those fortunate enough to not be overly affected by these challenges have done so by the skin of their teeth, and, therefore, the vast majority are counting their pennies a bit more closely when it comes to variable expenditures.
An unplanned variable expense you might be considering could be an appraisal, either for newly acquired or existing machinery & equipment, industrial & commercial real property, or an overall business valuation. When budgeting for expenses that are not already engrained in your company, the question may arise as to whether the benefit outweighs the cost. Is this type of expense absolutely necessary, or can your business live without it for another year or so
Some unforeseen costs are necessary but have no beneficial measurement, such as increases in overhead, like rent, insurance, and maintenance/repair costs. Others, such as asset valuation, can be weighed against the potential to save money when acquiring used equipment, or maximizing potential value in a sale or financing transaction.
When weighing these costs, it is important to consider paying a bit more for a better quality product, which will provide the best “bang for your buck,” with the benefit further supported by an experienced service provider, who won’t sacrifice quality to provide the cheapest available option.
It is always a difficult decision when entering into a relationship with any new vendor or contractor, to choose a business that not only fits with your company’s profile but can remain a long-term option, should you need to complete the process again down the road. An accredited, certified appraisal professional is one of those types of providers who will fit both your short and long-term needs, and make the expenditure easier to justify, given the overall benefit you will reap as a result.
Supporting variable costs will always be a difficult challenge facing businesses every year. Making sound decisions will come down to choosing the right partners who understand your requirements and will provide the best overall product that maximizes future benefits.