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How to valuate shop equipment for retirement sale

To update everything, all you guys who correctly say that diversification = security... Get your I-Told-You-So's out.

I waited too long to enact my super secret plan. Our big customer was bought by some giant company last year, and will be closed at the end of this year. Not the biggest of surprises, but goddamnit just the same.

Among their current jobs, some of it will be going to Malaysia, and some of it will be going to a sister company in the States. Sister company has their own local machinists, but I'm told they really only work on smaller jobs. So this could be a disaster for us (in which case, we'll figure out how to retire with what we have), or it could be a massive opportunity to focus solely on the larger jobs that are more automation friendly, but now with an expanded reach. Either way, the words "shit show" come to mind when I imagine the next year or two.

Or maybe we'll be homeless for awhile. I hear it's pretty popular these days.


Sure glad I stuck to the 20% and not the $4M....


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Think Snow Eh!
Ox
 
I was in your shoes 4 years ago, all the planning in the world did not help. You have enough high end equipment to have a good auction sell, do so. IF you sell it yourself you will take in more money, but you will have to pay the tax man back on the recapture of depletion so you share the gain with him. At first the high end bargains will be sold and it will look good... but then it stops and you have a lot of stuff to sell and the locals dont want it so you drop drop drop the price until some of it sells. It now 3 years later and you are still selling stuff, not retired, not collecting rent, paying the power and real estate taxes. Keep in mind you have to show,load and deal with these bargain hunters and looky lowes, and be told if I dont buy it who will, you will get real pissed off. I could not have a auction with covert 19, in the end the scrap man won. I would never waist 4 years of my life again...
 
I was in your shoes 4 years ago, all the planning in the world did not help. You have enough high end equipment to have a good auction sell, do so. IF you sell it yourself you will take in more money, but you will have to pay the tax man back on the recapture of depletion so you share the gain with him. At first the high end bargains will be sold and it will look good... but then it stops and you have a lot of stuff to sell and the locals dont want it so you drop drop drop the price until some of it sells. It now 3 years later and you are still selling stuff, not retired, not collecting rent, paying the power and real estate taxes. Keep in mind you have to show,load and deal with these bargain hunters and looky lowes, and be told if I dont buy it who will, you will get real pissed off. I could not have a auction with covert 19, in the end the scrap man won. I would never waist 4 years of my life again...

How many CNC's did you have? Didn't you have a bunch of manual machines and an old 20 ton 4" G&L HBM with Morse taper spindle, outriggers and no rotary?

The OP has a shop full of 3 ton Brothers that every shop in America would like to own.
 
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I was in your shoes 4 years ago, all the planning in the world did not help. You have enough high end equipment to have a good auction sell, do so. IF you sell it yourself you will take in more money, but you will have to pay the tax man back on the recapture of depletion so you share the gain with him. At first the high end bargains will be sold and it will look good... but then it stops and you have a lot of stuff to sell and the locals dont want it so you drop drop drop the price until some of it sells. It now 3 years later and you are still selling stuff, not retired, not collecting rent, paying the power and real estate taxes. Keep in mind you have to show,load and deal with these bargain hunters and looky lowes, and be told if I dont buy it who will, you will get real pissed off. I could not have a auction with covert 19, in the end the scrap man won. I would never waist 4 years of my life again...
I could liquidate my shop in a very short time and not lose my backside in the process.......................o'course if'n it was 2008 we'd have a different tale to tell..............the OP's shop would move fast if he started puttin items up for sale. He has desirable/marketable equipment
 
Agreed.

I don't see an overabundance of step pulley B-ports or shapers in the mix.


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Think Snow Eh!
Ox
 
How many CNC's did you have? Didn't you have a bunch of manual machines and an old 20 ton 4" G&L HBM with Morse taper spindle, outriggers and no rotary?

The OP has a shop full of 3 ton Brothers that every shop in America would like to own.
If he has high end stuff a acution is the only way to go, in 2 weeks the building is empty, money is in the bank and it is done. With inflation the used will bring good money. everything I went tru ,anyone would selling it yourself it is just not worth it and there will be bidding wars and the owner will be happy.
 
@Matt@RFR What's the update? Super curious on how that closure ended up affecting things, if it has yet anyway
We laid everybody off when we finished up all the big jobs we had, and it's just been my wife and I working. Right now we've got about a month backlog on one machine.

Big customer is still sending us work, but we're now shipping it to sister company who will take over big customer's work.

Big customer is officially shut down on 12/31, so I'm going to just hang out and see what Q1 2024 brings. After that, decisions need to be made.

You're welcome to come up and chat if you'd like, no matter which way things go. Bring guns if you want to go to the range. That's my version of doing business at the golf course. 😄
 
We laid everybody off when we finished up all the big jobs we had, and it's just been my wife and I working. Right now we've got about a month backlog on one machine.

Big customer is still sending us work, but we're now shipping it to sister company who will take over big customer's work.

Big customer is officially shut down on 12/31, so I'm going to just hang out and see what Q1 2024 brings. After that, decisions need to be made.

You're welcome to come up and chat if you'd like, no matter which way things go. Bring guns if you want to go to the range. That's my version of doing business at the golf course. 😄
Cool, that sounds super fun actually. You free next week? I'll have to see what I can bring up to the range.
 
I hate to see a shop nearing its end, and wish you the best. I have focused on a few customers most of my time in business and it too is biting me in the ass now. We had a dang good run but its layoff time and I will likely be alone again in the shop in the next couple of weeks. I am personally in a good position, but sure sucks letting good guys go ( sounds like you didnt have that problem haha )

On to the next chapter I guess. The more things change, the more they stay the same ( at least in oil related manufacturing )
 
I hate to see a shop nearing its end, and wish you the best. I have focused on a few customers most of my time in business and it too is biting me in the ass now. We had a dang good run but its layoff time and I will likely be alone again in the shop in the next couple of weeks. I am personally in a good position, but sure sucks letting good guys go ( sounds like you didnt have that problem haha )

On to the next chapter I guess. The more things change, the more they stay the same ( at least in oil related manufacturing )
Thanks Mike, I appreciate that! And good luck to you as well. Will you continue on as a smaller shop? Or is there a big change in your near future?

Yeah, one or a couple big customers is walking a fine line for sure, but if it works, it works...until it doesn't. :D

Layoffs and slow shops are a thing in my area right now. A good friend just had to lay off his own son because they are so slow. This, too, shall pass.
 
Oh jeeze, you guys are crazy ! One week buying Rolexes, the next week hocking them ! :D For my whole life the oil biz has been that way ...
Nah, you don't survive this business if you buy rolexes. ( dont care about high end stuff anyway )

I have been stacking money away and just bought 224 acres to retire on. Im decently set to retire in a year or so, ( Im 48y/o ) but it sure would have been nice to make a little more before I go ride off into the sunset
 
I have been stacking money away and just bought 224 acres to retire on. Im decently set to retire in a year or so, ( Im 48y/o ) but it sure would have been nice to make a little more before I go ride off into the sunset
Congratulations! And here we are looking for a meazly 20 acres... :D
 
Thanks Mike, I appreciate that! And good luck to you as well. Will you continue on as a smaller shop? Or is there a big change in your near future?

Yeah, one or a couple big customers is walking a fine line for sure, but if it works, it works...until it doesn't. :D

Layoffs and slow shops are a thing in my area right now. A good friend just had to lay off his own son because they are so slow. This, too, shall pass.
I will continue on with either one employee or just myself for the next year if business allows. Will start selling off machines as conditions dictate. The new property is out of state and rural, I dont see the possibility of doing any machining there. My job will be holding onto what I have and learning investment strategies. And hunting and fishing. And a few cattle.
 








 
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