Usually, the motivation to sell a company may dictate the price you are willing to accept. If you were under duress from the Mob (an assumption, but heaven forbid), you would most likely consider any floated figures to be reasonable. If you could make it on the Billionaire List and you wanted to get rid of one of the many companies you own, you would not be in a hurry to take the money and run; you’ll most likely wait for a favorable price to come along.
Being in neither of these situations, most plant manufacturers are forced to look elsewhere: to inventory liquidators.
Before you sell a company or dispose the costly machinery and equipment at a throw-away price, it is advisable to know the value of these assets. But not every plant owner does this. Whenever you find yourself in this situation, time might be right to call in professional surplus liquidators.
These experts will carry out a thorough analysis of the assets based on various factors such as the age of the equipment, its condition, cost of replacement just to mention a few. On top of the detailed analysis, the liquidator knowing your reason for selling the company will help them furnish you with the most accurate equipment appraisal.
The Different Levels of Value
Think of levels as reasons for selling a business. While machinery valuation has many nuances to it, majority of the sales can fall under three main categories: sold at an orderly liquidation value, at a fair market value, or at a forced liquidation value.
Each individual value factors in the uses for the equipment, the available time to sell, and the compulsion to buy or sell.
Let’s look at each briefly.
Fair Market Value
When the buyer is desperate for the seller’s equipment, the latter can usually hold off for a higher price. And if the seller is in desperate need of disposing the equipment, the buyer may get it at a bargain.
When both parties are under no obligation to purchase or sell, inventory liquidators can valuate the equipment and help you determine a fair market value for your assets, as well as facilitate the sale.
Orderly Asset Liquidation
In this level, the seller has time on their side.
Again, a liquidator would take into account the date at which the machinery must be disposed and slap a reasonable valuation that would attract a buyer within the ideal time period, ensuring the seller doesn’t incur loss.
Take the example of a company owner who’s looking to retire by a particular date and will require the proceeds to purchase a retirement condo.
This is done when the sale of certain machinery or equipment is not a matter of choice, but rather, a mandatory affair.
A bankruptcy case, for instance, may force the judge to order liquidation of the machinery and other assets of a company in order to appease the unpaid creditors.
The thing is, whenever you are faced with the prospect of shutting down shop, seeking the service of reputable liquidators will ensure every single factor that goes into equipment valuation is not overlooked. Ultimately, this means more returns for you.