Understanding what your business is worth is always immensely helpful info, but one piece that’s often overlooked is your equipment itself. To get the best possible picture of what it’s worth, you need to get a professional equipment appraisal. But how do you gather information for an equipment appraisal, and what do you need to know about the process itself? We go into detail about that below.
How to Gather Information for an Equipment Appraisal
To prepare for an equipment appraisal and make the process a little faster, you can organize and get out any relevant documentation that would help an appraiser identify equipment.
In particular, an appraiser will need to know:
- The make, model, and serial number of the equipment
- The condition the equipment is in
- Whether the equipment has had consistent upkeep
- The maintenance records of a piece of equipment
- If the equipment has any special features or pertinent upgrades
Generally, most appraisers will let you know all the documentation they need to provide an accurate appraisal.
Once the appraiser has noted the detail of all the equipment, the appraiser will establish a value for the machinery/equipment and create and certify the report for it.
How Long Will the Equipment Appraisal Take?
How long an equipment process will take depends on multiple factors:
- The quantity of equipment that’s being appraised: a sprawling factory with tons of pieces of machinery will take significantly longer to appraise than a small, family-owned restaurant.
- How many levels of value are being requested
- The type(s) of equipment
Because of these factors, it’s difficult to give a general estimation of the time it takes to perform an equipment appraisal.
When Is It the Right Time for an Equipment Appraisal?
Most commonly, equipment appraisals are frequently done during the following situations:
- Business mergers or acquisitions
- Business valuations
- Filing for bankruptcy
- Financing and SBA lending
- Setting up or claiming insurance
- Buy/sell agreements
- Property taxes
- Partnership dissolutions.
What Will It Cost to Get an Equipment Appraisal Done?
Because each equipment appraisal has a different scope, like estimating the time it will take to complete, it’s difficult to nail down an exact number. Usually, the less time it will take to complete, the more affordable an equipment appraisal will be.
Getting an equipment appraisal can be immensely valuable for your business. You can get a clear picture of what it is worth and how much it factors into the overall value of your company.