Practice talk often uses about six to twelve months as the “orderly” window. Confirm the written definition in the report you are actually buying. Do not borrow a blog’s months.
Which premise should you ask for before anyone walks the bay?
Name the intended user and the premise in the engagement letter. A lender who must liquidate the collateral usually wants OLV. A going-concern buyer who cares about remaining life and installed software usually wants FMV in continued use. A shutdown clock wants forced liquidation. Paying for the wrong premise wastes the day and the fee.
Asset value versus earnings value is the floor test. How much a machine shop is worth is the search sibling. The machine list is the extract.
| Premise | Question it answers | Question it refuses |
|---|---|---|
| OLV | What would an orderly sale bring with time to market? | What is the iron worth bolted down with software seats? |
| FMV in continued use | What is it worth as part of a running concern? | What would a sheriff take next Thursday? |
| Forced liquidation (FLV) | What does a short-clock auction bring? | What would a healthy shop’s lender underwrite? |
| Broker opinion | A marketing range on the going concern | A USPAP number on a serial |
Census CBP 2023 counted 284,452 establishments, 68.4% under twenty employees (Source: Census CBP). Plenty of those files have enough iron that the floor test is worth commissioning. This site still will not invent asking prices by model year.
When does OLV already beat the earnings story?
When the appraised OLV total plus clean net working capital exceeds size-band earnings value. Then stop arguing a growth turn. Main Street manufacturing in BizBuySell’s 2021–2025 set cleared at 2.75x median SDE on about $268k of earnings (Source: BizBuySell). On that room, tired iron can already be the number.
SBA 7(a) still caps at $5 million with a 10% injection (Source: SBA). A lender who asked for OLV cannot use a continued-use brochure as a substitute.
What does OLV refuse to do?
It refuses to value customer-owned tooling as if it were yours. It refuses to treat a control upgrade that exists only as a quote as installed. It refuses to price pits and sumps — that is the environmental stack. All Appropriate Inquiries / ASTM remains the start when history is wet (Source: EPA / 40 C.F.R. Part 312). Do not ask the M&E appraiser to waive a Phase I.
The FAQ index keeps OLV and Phase I on separate slugs for that reason.
ISM PMI 54.6 and Fed utilization 76.0% are climate. They do not set a VMC price.
How should a seller commission the report without shopping for a premise?
Write the intended user on the engagement letter before you pick the firm. A lender-user OLV and a buyer-user FMV in continued use are different products. Asking one appraiser to “just value the machines” is how you pay twice.
Do not shop premises until the number looks friendly. That is not an appraisal. That is a brochure. If the floor is going to beat earnings value, you want to know now, not after a CIM that promised a growth turn.
Desktop opinions, walk-through opinions, and full USPAP reports are not interchangeable. Ask which one you are buying. Ask whether the effective date will still be alive on a 223-day calendar. Ask whether the serial list you already have is complete enough that the walk is not a scavenger hunt.
Spare cells, tombstones in the parking lot, and a control upgrade that exists only as a quote will waste the day if they are not marked. Mark them. The appraiser is not your historian.
Do not ask the same person to waive a Phase I. Pits, sumps, and paint lines sit on the dirt stack. OLV does not clean them.
What should you stage before the appraiser arrives?
A serial-level list. Insurance schedules that match. Liens marked. Leased and customer-owned items marked out. Spares separated from production cells. The premise named. The intended user named. An effective date you can live with — a report dated eighteen months ago will be discounted on a 223-day median close calendar.
OLV is a premise you name before the walk. It is not a number you hunt after the CIM is already in the market. If the floor is going to win, you want that news while you can still write an asset-aware process. If the floor is not going to win, you still want the report so a lender can underwrite the iron. The estimator owner teaches the vocabulary. An appraiser writes the dollars.
Jason Taken is a business broker. He can help stage the list. He will not write the number. Name the intended user on the engagement letter. A lender-user report and a buyer-user report are different products, even when they walk the same bay.
Educational information only. Not an appraisal. After the owner estimator, the path is a confidential intro call.