Hiring An Auction Company

Estimating your assets value:

Typically, one of the first questions a business owner will ask me is, “how much will the assets bring at an auction”. After taking the time to review the assets, the auctioneer should give the client a conservative estimate of the sale based upon his experience and the current market trends. It is important that the company give realistic expectations so the seller can make informed decisions based on their best interest.

Compensation and Expenses:

Is the company you are considering working for you or against you? The agreement you decide may determine this.

A business owner should carefully consider how the auction company is compensated. The most common commission structures include: straight commission, outright purchase of assets, guaranteed base with a split above to both auctioneer and seller, guaranteed base with anything above going to auctioneer or a flat fee structure.

In a straight commission structure, the company is paid an agreed upon percentage of the total sale.

In an outright purchase agreement, the auctioneer simply becomes your end buyer. The company purchases your assets and relocates them. While this can be an option in some unique situations, keep in mind that they will want to purchase your assets at a very reduced price to make a profit at a later date.

In a minimum base guarantee, the auction company guarantees the seller that the auction will generate a minimum amount of sales. Anything above that amount either goes to the auction company or split with the seller. While a seller might feel more comfortable doing an auction knowing that he is guaranteed a minimum amount for his sale, keep in mind that it is the best interest of the auction company to secure a minimum base price as low as possible in order reduce their financial liability to the seller and secure higher compensation for the sale.

In a flat fee structure, the auctioneer agrees to show up for the sale and call the auction. There is no incentive for the auctioneer to get the best prices for your assets. The auction company is compensated regardless of the outcome of your sale.

What is the best option for business owners? In my experience, an agreed upon straight commission structure. This puts the responsibility on the auction company to offer the best outcome for everyone involved. There is an incentive for the auction company to work hard for both parties, set up and run a professional sale, get the highest bid and sell every item on the inventory. Successful auctions translate to a higher bottom line for both the seller and the auction company.

Auction Expenses:

In most auction agreements the expenses to conduct an auction are passed to the seller. If the auction company pays for the expenses, it is simply absorbed in higher commission rates.

All expenses should be agreed upon in advance in a written contract. Typical expenses will include the costs of advertising, labor, legal fees, travel, equipment rentals, security, postage and printing. A reputable auction company will be able to estimate all expenses based upon their experience in previous auctions. An agreement should be actual costs charged as expenses, not an estimated amount.

Advertising is typically the highest cost in conducting an auction. The auction company needs to set up an advertising campaign that will promote the sale to its best advantage and not overspend to simply advertise the auction company.

Once the auction is complete, the auction company should provide a complete breakdown of all expenses to the seller, including copies of receipts within the auction summary report.

Buyer’s Premium:

What is a buyer’s premium? If you attend auctions regularly, you are very familiar with this term. The auction company charges a fee to the buyer when they buy an item at auction.

The buyer’s premium has been around since the 1980′s and is standard auction practice. It was first used by auction houses to help offset costs of running brick and mortar permanent auction facilities. Since then, it has spread to all aspects of the auction industry. It is prominent in online auctions and allows auction companies to cover added expenses incurred from online sales.

It is the responsibility of the auction company to provide clear disclosure of the buyer’s premium to both the buyers and the sellers. Those not familiar with auctions are often taken back by the buyer’s premium. They looked upon it as an under handed way for the auction company to make more money. Reputable auction companies will provide full disclosure within the auction contract, advertisement and bidder registration.

Typically, an auction company will charge online buyers a higher buyer’s premium percentage than those attending an auction in person. Extra fees are incurred with online bidding and are charged accordingly to online buyers. This provides the seller a level playing field for both online buyers and those attending the auction in person. Without the buyer’s premium, there is no way to do this.

Pre-Sales:

We’ve all been there. We’re looking forward to attending an auction only to find that some items were sold prior to the auction date.

As an auctioneer with over thirty-six years of experience, I can honestly state that pre-sales will hurt an auction. When a company decides to liquidate their assets, it is easy to sell off high-end pieces of equipment through online sources, equipment vendors or to other businesses. The seller receives instant cash and avoids paying a commission to an auction company.

Auctioneer’s find themselves appearing to acting in a self-serving capacity when potential clients say they are planning to sell off parts of their inventory prior to an auction. It’s hard not to consider the auctioneer’s commission when they warn you not to pre-sell anything. Yes, the auctioneer wants to earn a commission on those sales but it is more important that the auctioneer protect the sale from potential negative backlash that comes from pre-selling. The buying public knows when an auction has been “cherry picked” prior to the sale and it reflects in their bidding. It becomes a sale of “leftovers” and that impacts prices.

A buyer who purchases prior to the auction usually does not attend the sale. They already bought equipment at a good price with no competition. If they do attend the auction, they tend to let others know of their great pre-sale purchases which again, impacts prices and the overall excitement of the sale.

It is important to understand that auctions work best with a complete inventory. You want competition on your higher end equipment. The easy to sell items make it possible to gain respectable prices for hard to sell items.

When a business owner decides to liquidate their equipment assets, there is only one opportunity to do it right. Hiring a reputable auction company will assist you with a professional, orderly and timely liquidation.

Don’t Shy Away From Special Education Programs For Your Child

If your child has special needs or a disability, special education may help your child succeed in school and in life. However, many parents fear that their child will be singled out for special education classes in a room separate from their classmates, so they avoid seeking out special education arrangements.

While this was the case at one time, current special education laws require schools to provide an educational environment that is as unrestrictive and equal for all children as possible.

Are you unsure whether your child qualifies for special education? Do you wonder if special education services would help your child succeed in school? The definitions of eligible disabilities have been greatly expanded to include learning disabilities and emotional challenges as well as physical disabilities.

Some of these definitions are set by the states, and the federal government decides some. Regardless of what type of disability your child has, special education is the best way to ensure that your child is getting the education that your child deserves.

Without special education services, your child may be at a disadvantage. Even with a caring and patient teacher, many children find themselves unable to keep up with their peers in the classroom.

Setting out a clear and fair special education plan will give you, your child and the school the assurance that appropriate measures are being taken on your child’s behalf in the classroom. These may include additional time with a teacher or special education facilitator, physical accommodations, or any other reasonable accommodation that the school is able to offer.

When seeking special education arrangements for your child, your first step will be to obtain an Individualized Education Plan (IEP) for him. An IEP should be developed for each child with any disability and is the single most important piece of documentation in your quest for equal education for your child. It outlines goals and objectives for the student, along with a description of which accommodations will be necessary to facilitate those objectives.

The IEP process begins when you or your child’s teacher notice that the child is struggling in school. The concerned party will request a referral for special education services, which typically will result in an evaluation by a committee comprised of school faculty and you. The evaluation will determine whether your child’s disabilities interfere with his educational experience. If so, an IEP will be developed.

When the IEP is in place, your child will have access to the special education services covered by the Individuals with Disabilities Education Act (IDEA). Under IDEA, your child is entitled to an education equivalent to that of a child without disabilities in the least restrictive environment possible.

The Least Restrictive Environment (LRE) mandate is the result of many years of studies. The conclusion of these studies was that special needs children are better served in the classroom with their peers than in a segregated classroom environment. The practices of pull-out programs, separate “special-ed” rooms, and the stigma of being a “special-ed kid” have changed radically in the past decade.

Children are now encouraged to flourish first in the regular classroom, with accommodations and modifications if necessary. If it becomes clear that this setup is not in the best interest of the child, the school or the parent may request a re-evaluation of the situation.

Recent studies have proven beyond a doubt that children with disabilities have more opportunities to thrive when they are educated in the same environment as non-disabled children. Observing and interacting with other children helps students with disabilities to maintain a sense of normalcy and develop their social skills. An inclusive classroom, one that includes special needs and non-special needs students, can also help the non-special needs students develop valuable social skills.

By taking down the barriers between disabled students and non-disabled students, IDEA has made the special education environment a more nurturing and beneficial place for your child to receive the education your child is entitled to. There is no longer any need to be nervous about the negative impact that special education will have on your child because the process has been refined to be as positive as possible.

The special education environment found in schools today is one that provides an improved learning experience for your child. With the help of supplemental support staff and special training for classroom teachers, your child’s school can provide the type of environment that makes it possible for him to thrive and to achieve all that your child is capable of achieving.

Capital for a Home Based Business

Raising capital for a home based business is a difficult process. This is primarily due to the fact that most home based businesses are not qualified for small business administration loans. The SBA wants to see that jobs are being created with the capital that they are providing to small businesses. As such, if you are seeking debt capital for your home based business then you are generally going to need a conventional business loan, a personal loan, or a working capital line of credit. Most importantly, if you decide to go down this funding road then you are going to need to make sure that you have the appropriate collateral and credit score in place so that you are able to effectively receive the capital that you need to launch operations. As it pertains to collateral, you can expect that a bank is going to want to see that you have a substantial amount of equity in your home, retirement accounts, and vehicles. In a way, you can consider any debt obligation that you undertake to be a personal loan.One of the other ways that you can raise capital for your home based business is to use a working capital line of credit that is secured by any inventory that you are purchasing. This will ensure that you are able to acquire the goods that you need while also being able to focus your remaining financing on marketing efforts. This is especially true if you are launching an online based business that is based out of your home. An alternative to this is that if you accept credit cards via a merchant terminal then you can receive a lump sum loan based on your monthly receivables. However, this is an extremely expensive method of financing a new business. As such, you should focus on using your own savings or obtaining a standard line of credit rather than going down this road.Finally, you can always work with friends and family as it relates to obtaining the capital that you need. However, working with friends and family in order to start a home based business comes with a number of complications. Mainly, if the business does not do well or fails then these individuals will either lose their investment or you will be required to pay them back with a business that is not producing any income.In closing, you should decide which methodology is best for your in regards to raising capital for your home based business. Each type of financing scenario has its pluses and cons.


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