If you own a business that has existed for a long time or has just started, you may have heard the term “Machinery Appraisal” or even “Equipment Appraisal.” Most business owners are advised to conduct this appraisal at least once every year to know how much their business is worth tangibly.
Businesses include a lot of assets and liabilities. If you’re thinking of selling your business or even expanding into a new one, you must know about the money your equipment is worth. Thus, an Equipment Appraisal is necessary.
Why Is an Equipment Appraisal Important?
Equipment Appraisals are necessary to know the actual worth of your business. We have listed a few reasons why Equipment Appraisals are important.
- It can provide you with a complete analysis of the value of your machinery. You would know what you’re looking at when you wish to buy, sell or upgrade this equipment. Having this knowledge prevents you from facing any loss in your dealings.
- An official Equipment Appraisal means that you will have the resources and a detailed analysis report on what developments to make for the growth of your business. Having an analysis and a report means that you have something tangible to base all of your decisions on, which can be extremely useful.
- An external firm does an equipment appraisal, which means it can limit any biases you have for your business. You are likely to get an honest look into the position of your equipment.
- An Equipment Appraisal is also evidence or proof of the worth of your company. It’s one of those extremely important documents that are required when you are filing an insurance claim. If your machines are destroyed or face an issue, you need to know the most current value of your equipment, so your insurance pays you the same amount. It can’t be anything more or less.
When Would You Need to Perform Equipment Appraisals?
Many people claim that you should have an equipment appraisal done at the time you get the machine. This practice helps cement your insurance claims if they were ever to arise. We have also listed other times you need to perform an equipment appraisal.
- Mergers and Acquisitions
- Business Valuations
- Financing and SBA lending
- Buying/selling agreements
- Property taxes
- Partnership dissolutions
How Long Does it Take For an Appraisal to Occur?
Many factors dictate the length of time it will take for an equipment appraisal to be conducted. First, it depends on the amount of equipment being appraised. The more the equipment the longer it will take.
The other major factor that affects the time taken for an appraisal is the timing requirements. When do you need the appraisal? How many levels of valuation do you require? How rare is the item that you’re having appraised? The greater the levels of valuation and the rarer the item, the more time it will require for the appraisal to occur.
How Much Will an Equipment Appraisal Cost?
There are many different ways that a firm will evaluate how they’re going to charge you. The three major ways are:
● Amount of Line Items
● Amount of Time
● Flat Rate
Before you get an equipment appraisal conducted, you have to know that you will have to pay for it. However, the amount that you pay has much to do with your needs. Every client has different needs. The cost depends on factors, like duplicate items, small cost items that can be combined, time taken to travel, the number of locations, etc. All of these factors can affect the amount of money you have to dish out. Most companies will try to lower their bid unless there’s something that takes them significant effort.
Murphy Business & Financial Corporation — For All Your Equipment Appraisal Needs
Establishing a business is not easy, and you need to know how much your business is worth. To properly understand the worth of your business, you will have to perform an equipment appraisal and receive certification.
If you’re looking for the answer to all your questions about the value of your equipment, you’ve come to the right place. At Murphy Business and Financial Corporation, we give you an unbiased evaluation of the worth of your business and equipment. We have many years of experience under our belt. Our experts have conducted valuations of various businesses over the years and can provide an exhaustive report for your business too.
If you’re looking for more information on equipment appraisals, contact Murphy Business and Financial Corporation or call (954) 507-5050 and speak to our appraisal experts today.