If you are looking to have an appraisal or valuation done on an equipment rental business contact us today for full details.
We have extensive experience appraising machinery and equipment and also rental businesses. We have worked with, sold, appraised, and consulted with thousands of businesses all over the United states including Raleigh, Los Angeles, Phoenix, St. Louis, Miami and everywhere in between.
Appraising an equipment rental business is often more complicated than simply applying a multiple to the annual cash flow of the business or applying a percentage to the annual gross revenue.
Three types of equipment rental businesses
In many cases these companies overlap into each other. For example, many tool companies may carry chairs or tents which may be used for parties or weddings, and many construction rental companies may carry tools. That said, the three most common calls we get are for tool, construction, and party equipment rental companies.
In the case of a construction rental company, a company may purchase a piece of heavy equipment such as a bulldozer. An $80,000 bulldozer may be rented out again and again. These types of businesses are generally quite profitable. With a good bookkeeper and accountant in place, entrepreneurs can take advantage of tax benefits such as depreciation of the equipment.
Buyers love reoccurring income
Sometimes when consulting with a buyer they have just left corporate America and have no idea what kind of business they want to purchase. In cases like this we will sometimes help the buyer in locating a business which suits their needs and wants.
Rental businesses with reoccurring income often speak for themselves.
Why do people have valuations and appraisals done?
We are often contacted by companies during audits, mergers and acquisitions, financial transactions, SBA loan applications, management performance tracking, estate planning, or divorce.
In the cases listed above most people are interested in what is called a certified appraisal.
In many cases the value of a company is higher than what the owner expected. Of course, this varies from case to case. Some businesses are worth 1x their annual incomes while others are worth 3x their annual income or have significant fixtures and assets.