http://naggl.org/AM/Template.cfm?Section=SBA_Statistics

Remember that many times with an SBA Loan a Certified Equipment Appraisal is required. Please call for a free quote the next time you need a Certified Equipment Appraiser.

Nathan Bazzle, MCMEA

Master Certified Machinery and Equipment Appraiser

800.785.6061

The first part of any machinery appraisal is making sure your asset / machinery list is up to date and as complete as possible. Many times we see this list several years outdated and with vague references to the equipment, this often leads appraisers to charge more as they find equipment while on site or worse to inflate the price going in because they know the asset list is poor and they are hedging their bets.  Both of these scenarios will cost you more $’s than needed.

Let’s start by looking at what the perfect asset list should look like.  There are some key elements to a perfect asset list that if followed could easily save your business thousands of dollars on a machinery appraisal (at least when dealing with us…). Here are the components of a perfect asset list:

• General Item / Property Name – Example: Bulldozer, Computer, Address of Property, General Description of Improvement, Etc.
• Location of Item or Property
• Make of Item – Caterpillar, Dell, Etc.
• Model of Item – Example: D-11, Inspirion M17, Etc.
• Year of Item – Year Manufactured if Machinery not purchased
• Serial Number
• Year of Purchase
• Cost to Purchase
• Current Depreciation Amount
• Item Tag Number
• General Specifications of the Machine – I.E. Size, Weight, Specifications, Options

Note: A digital picture with the item tag number should also be on file for every piece of equipment. And some items on the list will not touch every category like Commercial Property, Land Improvements, Etc.

This should be compiled on an excel spreadsheet for easy transfer between your accountant, your banker, your insurance agent, and of course your friendly neighborhood machinery appraiser.

So how does this asset list affect my machinery appraisal?

By having a solid up-to-date list like the one described you are able to speed up a machinery appraiser in the on-site visit / data collection phase and also help set some sanity check values for the appraiser. A good example of the sanity check is when appraiser is unsure of a machines options and year – a more conservative value may oftentimes be applied thus possibly lowering your overall appraisal value by thousands of dollars. A few hours of pre-work can easily be worth Tens of Thousands on your Appraisal.

This is also a good time to talk about the difference between an appraisal that is prepared where the appraiser comes on-site or where they do the appraisal off-site. There are a myriad of names for these types of appraisals but the basic difference is on-site vs. off-site.

On-Site (Summary Appraisal) – This is when the machinery appraiser will actually come to the location and collect the data / establish age and condition / etc. This is usually a more expensive appraisal due to travel costs and time spent collecting data (nearly double in our pricing) and is oftentimes required by banks. This is often also the default when a poor asset list is in place – poor records equal greater risk by a banker and less trust at the time of appraisal.

Off-Site (Desktop Appraisal) – This is when the machinery appraiser uses data / pictures / descriptions provided by the business to do the appraisal. The appraiser must still research the prices but the time / travel of data collection is removed equaling lower costs. Certified Consulting Group LLC has created an easy to use form to allow you to use the desktop option if you desire. We save companies thousands on their equipment appraisals every year because of this simple format. Visit our website www.certifiedconsultinggroup.com to contact us and order your form.

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

President of Certified Consulting Group

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

So what should companies be doing now?

Here are some of my thoughts on where a company should head in this post recession – pre-normal time frame.

First the negative, if a company has made it this far they have cut, shaved, tweaked, and generally changed their business. They probably have a firm grasp on their financial situation and are currently starting to feel a pinch because their customers are coming back but the lending is still lean and therefore capital for growth is tough to come by. Some businesses have found that in this time frame AR lending / Factoring and paying a lending Broker to find the money is the only way to get the capitol they need to place orders from vendors. Also something to note; several of the smaller Regional or Community Banks are starting to loosen funding quicker than the larger Banks (At least in Small Business Lending).  The obvious problem some of the lenders face is most businesses that have survived are pretty beat up – Sales are Down, AR is dated, and the three year track record is a downward slope. But when you compare that to the businesses that fail I would say that’s a great trade considering the whole Nation and even the World felt the same things.

Second the Positive, due to the fact a company has made it through this Recession they are the last one standing. The Customers have fewer places to buy from and therefore the next few years will have some fantastic growth opportunity for the companies left standing.

Here is the Main Issue;  Most of these companies will try to come back to life and return to business as usual. The problem with that thinking is the rest of the world is in Innovation Mode – they are taking all of the ideas, mistakes, and research and expanding their thinking. Countries Like China and Brazil are in explosive growth and innovation mode and currently America is lagging far behind. I have heard it blamed on everything from Banks, the President, and even 9/11 (10 years of free blame there). The reality is that companies who take this opportunity to innovate will leap ahead of the crowd over the next few years, and the companies who don’t will become dinosaurs.

So, I realize this isn’t your normal light and fluffy blog article – but being in the Machinery Appraisal Industry allows me to see a large expanse of industry and banking situations, and I must say sometimes its very dismal. Rarely do I see a company willing to step outside of its normal thinking and strive to innovate. But when I do see these companies its like a Fireworks Display – Bright and Fantastic.

Nathan Bazzle CMEA – President of Certified Consulting Group [a Nationwide Appraisal Company]

Download our Free eBook – Secrets of the Machinery Appraisal Industry – a Blueprint to Saving Time an Money

Want a Fast and Certified Machinery Appraisal or Equipment Appraisal?

We realize that the Machine Appraisal is oftentimes one of the last steps before getting the Loan or refinancing from Lenders or Banks.

Our Machine Appraiser Services focus on providing your Machinery Appraisal with a Certified and Professional Report that comes to you in about half the time as the Industry Average.

How can we do this? By having a database of over 5 million items, 1,100 machine tool distributors, 650 machine tool builders, and over 5000 tooling and accessory suppliers.

We then compile your data into Certified, Irrefutable, Substantiated, Professional Report

WE CAN FIND THE VALUE FAST!

Nathan Bazzle, CMEA / President

Certified Consulting Group LLC is a provider of Machine Appraisals / Business Valuations/ and Business Brokerage in the Midwest

You need to start now to make next year go smoothly.  Although the law doesn’t take effect until 2012, your prep should have started January 1^st.  So you could already be behind.

As the law reads now, you must have a W-9 form from all of your vendors from whom you purchase over $600 in goods or services.  Some examples would be the individual who cleans your office, your computer person, your lawyer, your accountant and even American Express and Visa.  Sounds crazy doesn’t it?  Well it is, but it is the law.

So what is a W-9?  You can find a blank one at http://www.irs.gov.  It should be in the left 1/3 of the screen.  Just click on it and it should pop up for you.  Hit print and poof you have a blank W-9 that you can give to your vendors.

So why start now if you have until January 31, 2012 to collect this info?  If you purchase a computer or a service in January of 2011, are you going to remember in December? Can you find the person you purchased it from, if you did not get it from a chain store?  Yes, you would have to have the chain stores’ Tax Identification Number (TIN#) also.

Now that you are confused, let’s make your life easier.

Not only do you have to get everyone’s TIN# you must also give yours out.  Your customers should be asking for yours also.  Don’t wait for them to ask, be proactive.  You know they won’t ask for it when it is convenient for you.  It will be at the least convenient time.  So make it at your convenience.  You can either fill out a W-9 and mail it with your invoice to them or as we have done, provide it on your invoice somewhere.  Your invoice is not signed like a W-9, but it should do the job.  If you choose to send a W-9, I would print one from the above website, fill out all the information, sign it and then make copies as needed.

This is the law as of February 1^st.  We are hearing that this may all change by the time next year rolls around, but why wait?  Be proactive.

Have a profitable year.

Guest Writer:

Bradley K Deck

Allman Johnson Company, LLC

317-843-1040

Bradley works for Allman Johnson Company LLC an Indianapolis based Accounting / CPA Firm

Here is the Article by Norm Heikens and my thoughts afterward.

Sales of small businesses recovered in the Indianapolis market last year, according to BizBuySell.
The San Francisco-based website recorded 29 businesses sold in the Indianapolis metro area in 2010, twice the 14 of 2009 and identical to the number of closings in 2008.
The small sample size makes it difficult to read too much into the numbers, said Mike Handelsman, group general manager for BizBuySell, which lists businesses for sale and is the largest company of its kind.
Nevertheless, Handelsman said Indianapolis clearly is bouncing back faster than the nation, based on the numbers it tracks. Businesses haven’t sold well the past couple of years because bank financing has been hard to come by, but also because owners haven’t wanted to let their companies go for fire-sale prices. In Indianapolis, Handelsman said, it appears that “People got very real about what their businesses were worth and got less than what they were asking for them, and therefore more were sold.”

As a local Certified Machinery and Equipment Appraisal company we have seen an upswing in equipment appraisals. These are coming from local Indianapolis Banks for loans and from private companies in Buy / Sell agreements. We feel this is partially due to Americans telling President Obama they want stricter financial controls in the future, partially due to the SBA loan discounts that ended December 31, and on a good note we are also seeing local Banks starting to increase lending.

Another interesting thing to note is equipment values are starting to move upward due to excess in the equipment market starting to dwindle.

Read into that what you will…

Nathan Bazzle, CMEA

President of Certified Consulting Group

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

Here’s why you should get a Certified Appraisal when selling or buying your business:

• A seller needs to know what their business is worth.

• A Certified appraisal provides that information and it becomes a piece of “sales literature” to hand to a buyer.

• Most Important! – The banker who finances the transaction will need to know the value of the business.  That information can be provided only through a certified business valuation, by a certified appraiser.

• When you are appraising Machinery/Equipment in Kansas, it is important to know the various industries involved in an assignment. Only a certified appraiser has access to the pertinent information required in each assignment.

As Machinery/Equipment Appraisers in Kansas, we find that while agricultural equipment is appraised on a regular basis, other types of equipment, particularly manufacturing equipment such as machine shop, as well as construction equipment is requested more than any other type.

There are only a few Certified Machinery/Equipment Appraisers in Indiana, Ohio, or Kentucky. And even business Appraisal companies who are also qualified to Sell your business or help you Buy a business. Call the broker who has sold over 400 businesses Nationwide since 1978.  Everything from $25,000 Liquor Stores to $52,000,000 Manufacturing Facilities.  Certified Consulting Group, LLC has the experience you need.

Nathan Bazzle, CMEA, CSBA

President of Certified Consulting Group, LLC

By reclassifying  project-related costs that were classified as real estate costs into personal property, land improvements, buildings, and land, and then depreciating personal property and land improvements at an accelerated rate. A business gains shorter depreciable tax lives for federal and state income tax purposes.

Personal property includes things like machinery, equipment, furniture, shelving, and various fixtures. Land improvements include things like sidewalks and fences. Because these items are useful for a relatively short period of time, they can be depreciated more quickly than buildings or land. The buildings category includes each of the building’s separate components, like the walls and roof; these can be depreciated at different rates.

Important to the cost segregation study is the hiring of a certified machinery and equipment appraisal like one provided by Certified Consulting Group. A certified equipment appraiser can conduct a site inspection and substantiate the value of any equipment or machinery on the property that would fall under the personal property or buildings categories of the cost segregation.

Important to the cost segregation study is the hiring of a certified machinery and equipment appraisal like one provided by Certified Consulting Group. A certified equipment appraiser can conduct a site inspection and substantiate the value of any equipment or machinery on the property that would fall under the personal property or buildings categories of the cost segregation.

Nathan Bazzle

President of Certified Consulting Group

800-785-6061