Almost every business owner we’ve met through my CPA firm has had business assets that are just sitting around.
There are two general types of assets that could be sitting around: hard assets and soft assets.
Hard assets are things, places or resources your business owns or controls. Soft assets are intangible assets, typically not actually existing in physical form. For example, an empty conference room is a hard asset just like a computer is. Whereas systems and client lists are soft assets.
It’s time for your business to get off its lazy assets!
A quick way to create cash is to put underused assets to work. Here are a couple of examples from “Smart Business Stupid Business”
Success Story #1
One of our friends bought a commercial building with a small auditorium/meeting spot. Her own business occupied the entire space, except for the auditorium. She used it once or twice a year. She realized that she had a valuable asset just sitting around idle, so she advertised it as a place for free!
The extra rental income covered the entire mortgage for the building. Her other business just got a place for free.
Success Story #2
A serial entrepreneur with years of experience in owning business, bought a struggling manufacturing company. He first looked at how busy, or rather, not busy, each division was. One of the divisions was basically just sitting there with nothing to do. There was a lot of capital in the company and he knew there were two choices: (1) close it down or (2) get it busy. So, he looked at the sales department. The ‘top’ sales guy said he had not made an outbound phone call in 35 years. The VP of sales said that their reputation was everything. They didn’t need to get sales, they just wrote down the orders.
He fired everybody and hired a whole new sales force. He took one of the sales people and put her full-time on the division with one mandate: pay for herself within 3 months. In 3 months, she’d booked over $1 mill in business for the once idle division. And this was in the middle of the worst recession our country has seen since the Great Depression.
What hard assets does your business have that are underutilized right now? Put them to work. You might be surprised how much they could be worth when they’re directed in the right way!
The above was an excerpt from Chapter 28: Multiple Streams of Passive Income from “Smart Business Stupid Business,” by Diane Kennedy, CPA and Megan Hughes.
Friday: Turn What You Know Into Dough