This is a quick guide to preparing for an Appraisal so you do not have to pay “Stupid Tax” in other words extra money because you made a mistake. First, for more information visit our website at www.certifiedconsultinggroup.com. We have prepared a Free 1 page Equipment Appraisal Cheat Sheet for you and a in depth 20 page eBook that will give you the edge you need when dealing with an Appraisal.

In today’s Banking and Business Buy / Sell environment many times you will need an Appraisal. With that in mind here are a few of the primary things you should know.

Define your need & choose your appraisal value (There are 12 total—these are the most used)

• Fair Market In Continued Use—Highest values based on market data, includes adjusted install and tweak in costs.
• Orderly Liquidation—Price you will receive selling your equipment over time to an interested buyer, Mid Value Range
• Forced Liquidation—Commonly referred to as Auction Value—Lowest Market Based Value
• Scrap—How much is it worth based on weight.
• Your Need will define the value you want your equipment to come in at: Low, Mid, or High Values

Prepare your Asset / Depreciation / Equipment List
Create your own “Perfect Asset List” with the following components to make sure you receive the highest values possible for your equipment.  Don’t leave this to an “Appraiser” that may be an Accountant or Auctioneer in disguise that has never seen your type of equipment before.  Make sure you give an asset list that specifically describes every piece of equipment with the following: Make, Model, S/N, Age, Condition, New Cost, Specifications, Options, & Hours / Miles.  We find that this one thing will make sure that an “Appraiser” will not miss that $10,000 option your specific machine has.

Interviewing the Appraiser—Questions to Ask

1. Are you Certified? By who? Do they test? What Designations do you hold?

2. What is your Appraisal Education background? What experience do you have with my type of equipment?

3. Can you meet my deadlines? How long will the process take?

4. Are you USPAP Compliant?

5. What Approach to value do you take and is it documented?

6. What values can I expect to receive? (Fair Market, Orderly, Etc.)

7. How do you charge and what are your fees?

A Certified & Professional Appraiser will easily be able to answer these questions and more.

Tip: 99% of Auctioneers, Dealers, and Accountants are NOT CERTIFIED!

To Learn More about:

• Negotiating the Fee!
• What Appraisers Actually do!
• And 11 Secrets of Appraisers
• Also—A deeper understanding of the topics discussed in this guide

Download our FREE 20 Page eBook

in our Next Issue: The Quick Do’s and Don’t of a Site Visit

Nathan Bazzle, CMEA CSBA – Author of “Secrets of the Machinery Appraisal Industry – A Blueprint to saving Time and Money”

President of Certified Consulting Group

While doing a client followup after a Machinery and Equipment Appraisal last week the client said “You have restored my faith in Appraisers”.  Now while this was good to know we have Completed a Certified Machinery Appraisal that my client was happy with. There is an underlying problem here.

Many appraisers out there are flying by the seat of their pants and producing poor quality nonstandard reports.  Although their are guidelines from groups like U.S.P.A.P. many appraisers simply either don’t care or don’t follow those guidelines consistently.  Another issue is in the report itself – You never know what you will get – Two horrible examples I have seen lately from previous appraisers included a 1 page Letter with a Number (no explanation or breakdown of the appraised items, and I also have seen a report with 2 paragraphs and a excel file attached (and the numbers were horrible to match).  GIVE ME A BREAK – you mean to tell me you get paid what a normal blue collar worker makes in a month and you can’t produce better quality than that?

We have standardized our process across all of our appraisers – And here is the process (in Condensed Form)

First and Foremost we talk too you to discover which Value you need – Fair Market Value, Orderly Liquidation, Forced Liquidation, Scrap, Etc. This makes a MASSIVE impact on the end value and can definitely impact loan decisions, IRS decisions, Etc.

A summary report will have at least 2 copies and have a Leather Bound and a Soft Bound copy. You will also receive a CD with a Digital Copy of the Report (save a tree and a afternoon at the copy machine for yourself). The report will have a description and options of each item appraised tied to its value and condition. When able we will also include full color pictures of each item – this helps you because many times this is the only time the other party may see your Machinery.

Now for the guts:

Each Appraised item is researched in depth – we then try to get at least 5 comparable items to establish Market Value.

An industry report is included when available – this shows where the industry has been and is going.

And Finally what to expect inside the cover:

• Summary Of Facts
• Scope of Work
• Degree To Which The Property Is Inspected Or Identified
• Extent Of Research Into The Physical Or Economic Factors That Could Affect The Property
• Extent Of Data Research
• Type And Extent Of Analysis Applied In Arriving At Opinions Or Conclusions
• Depth Of On-site Inspection
• Overall Condition Of Equipment
• Intended Use
• Economic Conditions
• Definitions Of Conditions
• Methods Of Evaluations
• Sources Contacted
• Market Conditions
• Final Value Summary And Reconciliation
• Appraiser’s Certifications And Qualifications
• Photographs

Nathan Bazzle, CMEA, CSBA

President of Certified Consulting Group LLC

As a Machine Appraiser I have closely watched the new Small Business Bill and how bankers and lending institutions are reacting to it. For an example over this past week I have met with 7 different SBA Specialists in different banks that are extremely busy. The reason – Business Owners need to get the SBA Loan done before December 31, by doing this they will save 3% of the loan value in fees. What does this mean for Machinery Appraisers – Appraisals and lots of them. Every SBA Loan over $250,000 has to have the collateral appraised by a Certified Machinery and Equipment Appraiser.

Nathan Bazzle, CMEA

President of Certified Consulting Group

The Marketing you are handing out right now will expire and be trash in 6 months…

We do many Business Valuations and Machinery Appraisals because of our website, marketing we have handed out live,  and through 2nd and 3rd degree connections when it finally comes back too us (sometimes this is years later). Also our clients tend to use us years apart like at times of growth (getting Loans or Buying / Selling their business) – Or during hard times when a CPA or Lawyer is usually involved. With that in mind it is ULTRA important that our Marketing material has the right information on it no matter when it finally gets to the client.

Here are 3 Things you should do to make your marketing NEVER expire:

WARNING: You May not like what you hear

1. GET YOUR OWN NUMBER: Do not use the companies 800 number or your desk number unless your OWN the company, Even then I would suggest getting a Google Voice Number that can be your permanent number that you can route to any other phone. Why spend all the time marketing and handing out cards that odds are will be a bad phone number in less than 3 years.  Or if you are an employee do you dare send your favorite customers through the 800 number. Here is a test – call your own 800 number and act like a customer and see if you can easily get routed back to yourself.

2. GET YOUR OWN EMAIL ADDRESS: Same reasons as above, but also add domain name changes and other things like hacked corporate accounts and all of a sudden your customers can’t reach you.  Here I suggest using a Gmail account – Yes I know its a free account but in my experience Gmail has better spam filters built in than most corporate filters. Also almost all corporate accounts can be routed to Gmail, your data phones play better with Gmail, and ultimately you never miss another email. Here some of you are saying “But I switch my email often to stop spam”, WHAT? Here is a suggestion, unsubscribe from all the retailers adds, filter the annoying sales people you are never going to give business too anyways, and keep that line of communication open to your current and future customers.

3. GET YOUR OWN WEBSITE: Oh this one scared half of you to death.  Imagine this: You highlight how wonderful the offer of the month is, talk about how you will provide some type of ultimate customer service on your widget, and … (wait for it) have them actually call and sign up with YOU – not a random customer service person on an 800 number. Or worse yet your Corporate site is a static information dump and the potential customer gets bored and clicks on that shiny google adwords offer (your competitor). I see a Salesman of the Year Awards in your future.

There are many more things to do down this road and I may write about them later or you can just call me on my Google Voice Number 317.324.8026 and we can talk about them.

These will get you started – Do these 3 Things and get new Business Cards printed NOW. Yes, you may have to buy your own business cards and maybe even your own flyer’s – but it will be worth it.

Business Owners – Instead of being mad over this think of all the extra sales you and your people will make and the fantastic customer service that will be provided because your people are easily accessible. The customers can actually call you from that piece of marketing that’s been sitting in their desk for 2 years just waiting for a need.  There is nothing more frustrating than trying to email someone or call them and the email or number are dead because an IT guy shut it down after the person left.  Another thought is that employee will not go into the same field and can then refer that business back to you.

I have seen so many moves in the past few years especially in Sales, Commercial Lenders, and Managers. That I know a lot of Business is slipping past in a time where you need to make as many sales as possible. Take this advice as you will, but know that as I meet top level sales guys and top level professionals they are more and more often having their own information on their own cards.

Nathan Bazzle, CMEA CSBA
Nathan is the President of Certified Consulting Group – A Business Valuations and Certified Machinery and Equipment Appraisal Company.  Find more from Nathan at www.certifiedconsultinggroup.com

While reading a favorite blog in my industry i came across a very timely article I wanted to share.  All I can say is Outstanding Post – as a fellow Certified Machinery and Equipment Appraiser in Indianapolis this type of basic and fundamental information is great to share as it is affecting all of us across the country. I know here in the Indiana / Midwest area business owners are seeing substantially less dollars for their business – usually a lot of this has to do with the capitol assets taking such a beating these past few years. Another thing to consider is that now may also be a great time to sell – the economy has created a lot of investors looking to give a cash infusion to a good core business and grow it either for a sale later or because it is easier to buy a business vs. starting a new one in certain situations.

Here is the Post:

Financial Advisors Urging Business Owners to Know the Value of Their Businesses

Because of the economic downturn, many business owners are reluctant to think about the value of their businesses. Fearful that their businesses have lost value, it’s the last thing they want to hear about. An article in Financial Advisor suggests that many business advisors are urging their clients who own businesses to have their businesses valued in order to gauge their business health and for planning purposes, including adjusting estate and succession plans.

Business owners have different reactions when they find out that their businesses are worth less than they once were. Some decide to delay selling their business, and others use it as an opportunity to make necessary changes. One business owner who was interviewed said that he was glad to know the value of his business because it enabled him to determine steps he needed to take to improve the business and prepare to potentially sell it within 10 years.

According to experts, some businesses are worth 30% less than a few years ago, and they argue that understanding the value of a business can help owners determine whether or not they should sell their business or bequeath it to the next generation. On a positive note, a lower valuation can benefit owners in terms of taxes right now. The article highlights the fact that if owners are planning to pass on the business to their children, now might be the time to do it, since estate taxes are “expected to rise next year and new restrictions on use of trusts could also be coming soon.”

By: Present Value

Certified Consulting Group Blog Written by Nathan Bazzle, CMEA