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. 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.
Read on for 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, you’ll want to determine which assets, machinery or items you want to sell. The types of assets generally fall into three main categories:
Inventory: Whether this is leftover stock, fresh inventory you can no longer sell or any finished goods that you will be unable to sell in the future, inventory may take up a great portion of the assets you wish to sell.
Assets used in the production of goods: This generally refers to machinery and heavy equipment that is used during the production process.
Remaining business assets: This category refers to assets and property used for your business that weren’t involved in the production of final goods or sales. This can mean any manner of office furniture, supplies or stationery.
After identifying which items in your business you wish to liquidate, the next step is to organize your list by category. This will help your appraiser sort through the items methodically and efficiently.
2. Records of maintenance and clean equipment are important
The next step in preparing for an equipment appraisal is to evaluate the state of your assets. The condition of your equipment, as well as lack of wear and tear, is crucial for an easy sale. For this, it is important to keep records of regular maintenance and repairs. Not only will this prove to potential buyers that your equipment is in great condition, but it will also fetch you a higher price. Your appraiser will adjust the value of the item depending on the condition or proof of maintenance.
Similarly, make sure your items are clean and tidy before they are shown to prospective buyers. Equipment that is free of scrapes, dents and scratches shows the appraiser that the equipment has been operated properly. It also allows for the owner or operator to inspect the equipment for cracks, loose bolts or any other easily fixable repairs before the final appraisal and sale.
3. Deciding how you wish to sell your assets is crucial
There are many different ways you could potentially sell your assets. For retail companies, a discount or mark-down sale could help sell inventory. However, larger assets like heavy machinery and equipment are harder sells because the general public often isn’t interested.
While you could sell your equipment individually on eBay or Kijiji, this is a time-consuming process requiring a lot more effort as each piece has to be listed and buyers may or may not decide to buy. Auctions will make this process much easier, especially if you partner with an asset management company or professional auctioneers.
Whichever route you decide to go with, certified appraisals are extremely important in making your sale as successful as it can be. Appraisers will find the best price for your items, along with suggestions on how to position the items to get maximum value out of them.
Another advantage of appraisals is that you and your employees can sit back and let professionals take over. This saves you the time and money it would take to do the work of appraising and evaluating the items for selling.
4. Appraisals require a lot of research and analysis
Once your items have been categorized and made clean, it’s time for the appraiser to come in and do their work. Always refer to a certified appraiser, as they will help you find the right price for your machinery or property after a thorough analysis and overview at the manufacturing, wholesale and retail level. The amount of time an appraisal takes depends on the number of items to be evaluated and other factors, such as if the records are readily available.
Appraisers will begin by requesting to see all the documents and relevant information related to the items that need to be evaluated. For equipment appraisals, the make, model and serial number of the machine are extremely important, so those will be requested as well.
The appraiser will evaluate the level of maintenance and repairs, and once everything has been analyzed and examined, the appraiser will begin the research stage. After research on industry standards and equipment history has been done, the appraiser will provide you with a detailed report with the most accurate value of your machinery.
Equipment appraisals in Toronto take into account various factors such as the general market conditions, marketability, timing issues as well as technological issues, and market trends and prices. This certified report will help ensure that your items stand out in the market and are priced in the best possible way to get you immediate and fair sales.
There you have it: 4 ways to plan your equipment appraisal. If you’re looking for certified appraisers in Toronto, partner with an experienced service provider like Michaels Global Trading. Our team has years of experience and are constantly updating our knowledge to keep up to date with any changes that will affect your appraisal. Reach out to our team any time 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.