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4 Important Things to Know When Planning for an Equipment Appraisal

Every business eventually comes to the point where they need to plan an equipment appraisal. It could be for auditing purposes, clearing unused inventory, downsizing, liquidation or bankruptcy.

Every business eventually comes to the point where they need to plan an equipment appraisal. It could be for auditing purposes, clearing unused inventory, downsizing, liquidation, or bankruptcy. While an equipment appraisal involves strategizing and many moving parts, such as inventory analysis and overviews at various levels, it doesn’t need to be demanding or difficult.

Planning ahead and familiarizing yourself with the process can make things easier, both for you and your staff. Knowledge of the following tips will help you be prepared when it comes to questions by the bank or potential buyers. Here are the 4 most important things you need to know when planning for an equipment appraisal in Toronto:

1. Categorize the Items You Wish to Sell

Before the official liquidation or auction process begins, determine which assets, machinery, or items you want to sell. The types of assets generally fall into three main categories:

  • Inventory: Leftover stock, fresh inventory you can no longer sell, or any finished goods that you will be unable to sell in the future.
  • Assets used in the Production of Goods: Machinery and heavy equipment used during the production process.
  • Remaining Business Assets: Assets and property used for your business that weren’t involved in the production of final goods or sales.

Organize your list by category, helping your appraiser sort through the items methodically and efficiently.

2. Records of Maintenance and Clean Equipment Are Important

Evaluate the state of your assets, and keep records of regular maintenance and repairs. This not only proves to potential buyers that your equipment is in great condition but also fetches you a higher price. Your appraiser will adjust the value of the item depending on the condition or proof of maintenance. Ensure your items are clean and tidy before they are shown to prospective buyers, as clean equipment demonstrates proper operation and allows for inspections before the final appraisal.

3. Decide How You Wish to Sell Your Assets

Consider different ways to sell your assets. For retail companies, a discount or mark-down sale might help sell inventory. However, larger assets like heavy machinery and equipment are better suited for auctions, especially if you partner with an asset management company or professional auctioneers. Certified appraisals are crucial for a successful sale, helping find the best price for your items and providing suggestions on positioning them for maximum value.

4. Appraisals Require a Lot of Research and Analysis

Once your items are categorized and cleaned, a certified appraiser will conduct thorough analysis and research. Always refer to a certified appraiser, as they will help you find the right price for your machinery or property after evaluating at the manufacturing, wholesale, and retail levels. Appraisers consider various factors such as general market conditions, marketability, timing issues, technological issues, and market trends to provide you with a detailed and accurate report.

For equipment appraisals in Toronto, partner with an experienced service provider like Michaels Global Trading. Our team has years of experience and stays updated with any changes that may affect your appraisal. Reach out to our team for an initial consultation or more information. If you would like to know more about equipment appraisals in Toronto, call Michaels Global Trading today at 888-471-5066 or contact us here.

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