Something that all businesses need to be able to do is to make as much profit from one year to the next as possible. In many respects, this is the ultimate goal of business – although many reputable business leaders would argue that making a difference of some kind is much more important. The truth is, making a profit is not just about marketing the business well and driving sales – although those are both essential practices. You also need to have a clear idea of what it is that keeps the money flowing – and, more often than not, the answer to that is ‘assets’. Business assets are really anything that your business could potentially turn into cash, or which has some value in some way. Knowing what’s an asset and what’s not can help you to make better decisions in the long run, so let’s take a look at some examples.
Property
If you are just starting out and your business is still quite small, then you might not have much in the way of property, if anything at all. Most larger businesses, however, do end up with some kind of property to call their own. This is good news, because property is about the most valuable asset that a business can possibly have. If you are ever in the position on being able to buy property in your business, then make sure you make the most of it. Housing markets are generally strong, and they tend to increase, so if nothing else having a building as the company’s own is likely to keep it in good stead further down the line. This doesn’t mean that you should just go any buy property willy-nilly, but owning a property or two is a strong position to be in.
Office Equipment
As well as your building, everything in it is pretty much an asset as well. All of your office’s equipment are assets, although you might not expect to get much for them. Often, it is the fact of having them which is more valuable than their actual sales value, so owning your own office supplies is something that will help to keep your business strong. Don’t forget, this includes computers and other electricals too – so it could add up to a significant figure, if ever you did decide to sell. And if you don’t, then all of these assets count towards your business’ overall value, something which you can use to gain leverage in the marketplace and in deals and propositions.
Data
So far we have looked exclusively at tangible assets. What this means is that they are assets which are based on real, physical things – buildings and equipment, for example. But there is another major type of asset – intangible – which is based on that which is not physically present. Data is a good example, and if you start to think about it you will notice that your business is full of it. Big data in particular is likely to have a real value, and this is worth bearing in mind, as it might make a difference further down the line. There is probably a lot of different kinds of data in your business, and it all has a value of some kind or another, so remember this when you are valuing your own company. You should also remember that, just as you would go out of your way to protect your building, so should you protect your data with any means available to you. Protecting data is often a case of encryption, at the very least, but you should also make sure you are pulling out all the stops to avoid your system being broken into at any point. Do this, and you are effectively looking after your business in a much more solid way.
Cash
Sometimes it is easy to get so caught up in the other kinds of asset that you forget about the most direct and obvious of all – cash. Cash is an asset which larger businesses are unlikely to see much of. It is not very often that they will take money in this way. However, there are many occasions where this is simply not true. When a retail business takes money from a customer and puts it in the till, that money becomes an asset. Of course, there is every chance it will need to go through various channels before it is taken into the company’s profits, so it is not quite the same.