Selling Your Business? How Much is Your Equipment Worth?

Selling Your Business? How Much is Your Equipment Worth?

September 24, 2012 | Joe Kerr

Selling Your Business? How MUCH is Your Equipment Worth?

You’ve decided to sell your business. OK, how do you price it? That’s a complicated question, but one part you will definitely need to know – How much is your equipment CURRENTLY worth? You shouldn’t trust just anyone to determine the value of machinery and equipment. Determining the value of machinery / Equipment should be done by a qualified and certified Machinery and Equipment professional appraiser. Having the machinery and equipment valued in accordance with USPAP (Uniform Standards of Professional Appraisal Practice) will assist your sale, as the valuation MUST pass muster with the SBA, IRS, Courts, Lenders, CPA’s and Attorneys..

M&E Valuations are a requirement, not only for business sales, but for other situations too. He are a partial list when getting an M&E valuation will help you accomplish your goals.

Buy / Sell Agreements
Business Valuations
Mergers & Acquisitions
Loans / Refinancing
Insurable Value
Trust / Estate Planning
Gift Planning
Divorce Settlement
Partnership Dissolution
Converting C Corp to S Corp
1031 Exchange
Foreclosure
Bankruptcy
Retirement Planning
Mergers & Acquisitions

If you find you need an valuation, call Calder Associates, as we know Machinery and Equipment, have professional and certified appraisers on staff, and are respected and sought out by other professionals in their fields!

Are You Ready?

Are You Ready?

July 7, 2008 | Joe Kerr

Are You Ready?

Are you ready to exit your business? Have you given it any thought? Think you may want to sell or retire within 5 years? It is not an easy task and if you are unprepared, it can not only be difficult, but costly and it may not bring the kind of rewards you anticipated.

You need to consider several factors including: family, your employees, the emotional attachment, the market, taxes, and your wants and needs among other things. You even have to think about what you will do the day after you exit.

You need to overcome the obvious obstacles to selling your business, determine where you want to be post sale, decide how best to get there and execute the plan.

How many family members are in the business and what are their expectations? How will your management team react and what are their needs and expectations?

Are there shareholders in the company and how do you handle them in the course of a sale?

Can you identify the key employees and mangers that would ensure continued success for a new owner? Will they stay or feel betrayed and leave?

Is your management team strong enough to run the company without you? This is critical if an investor or Private Equity Group is going to consider your company for acquisition.

There is a true balancing act in exiting a privately held business and many issues need to be addressed. There is a need for Attorneys, Accountants, Financial Planners and a qualified intermediary or broker who understands all the aspects of business transfers and succession planning. The last professional is one of the most often ignored people, but with the right individual selected, the one who usually leads the team and manages the eventual transaction to a successful conclusion. Your intermediary is the one who has the skill set to maximize the value of a sale for the benefit of the business owners.

Still don’t understand why certified and qualified intermediaries make a world of difference in a business sale? You are not alone. Contact us to learn more about how to make any planned sale a profitable one.

So, what is your equipment and machinery worth?

So, what is your equipment and machinery worth?

March 28, 2007 | Joe Kerr

So, what is your equipment and machinery worth?

Do you know the value of all the equipment and machinery that drive your business? All the machines, vehicles, tools, trucks, and equipment that allow you to generate the profits and cash flow you’ve grown accustomed to. You know its not book value, and you are uncomfortable about guessing its true value. You should have your machinery and equipment appraised by an unbiased and certified appraisal professional. You may ask yourself “Why should I pay for an appraisal?” The answer is simple… The fact is, in your business, the machinery and equipment may hold the greatest tangible value and be your biggest asset. If you own stocks, you more than likely check the value of your holdings on a regular basis so that you know what you have and what action you may need to take. Given that machinery and equipment can be a key element of any assets transferred in a sale, used for collateral on a loan, or used to help solidify value in estate planning, knowing the real value of your machinery and equipment is crucial.

Let’s briefly go over a few of the basic reasons why you need an appraisal on machinery and equipment. First, if you want to borrow against your asset, you will need to know and prove the Fair Market Value (FMV). Changing the tax status of a corporation (i.e. from a C Corp to an S Corp) requires a certified appraisal, as does elections to sell via an ESOP. Estate planning requires an appraisal. And finally (but not least), if you don’t properly value your business (including the machinery and equipment), the IRS will determine the value for you, and you will be doing a disservice to yourself and your heirs. When you are selling your business or doing a recapitalization through an SBA lender, your bank will require a valuation, possibly including a certified machinery and equipment appraisal. If your business is publicly traded, you must comply with Sarbanes-Oxley and FASB 141 and 142 that require the assets of the business valued on a periodic basis. When it comes time to exit your business, the proceeds of the sale will have to be allocated for the IRS and it will have tax implications for you!

Statistics prove that businesses that are properly valued prior to a sale sell within 7% of the asking price based on the valuation. Businesses that sell without a valuation sell for 80% or less of the asking price and take much longer to sell. Machinery and equipment appraisals are a KEY COMPONENT of a business valuation and are used by valuation professionals to insure accurate assessed value of all assets transferred.

If you want to give yourself the leg up on getting value for your machinery and equipment, contact us MEappraisals@calderassociates.com. Learn how successful businesses keep ahead of the game by knowing “what’s my equipment and machinery worth?”