It goes without saying that the contemporary business environment is ruthless as never before. Companies come and go daily, sinking under in the hugely competitive environments which they have never before been subjected to. Any modern business owner must work extremely hard to keep their business afloat and successful.
Liquidating assets is the perfect way to raise funds in such an environment. Historically raising money in this way has been associated with going into administration, however there are degrees of severity in the action. And modern businesses cannot afford to be proud when it comes to sending their assets down the river. It is good business practice to sell those parts of your enterprise which are not currently serving any function. One should not be stopped from doing so by pride or anxiety regarding public perception. To emphasis it once again, there is no room for self-regard in the current environment. Money is money, and it is the lifeblood of any business.
With that in mind, we’ve assembled a small guide on the best ways to turn your solid assets into funds which can assist with the day-to-day running of your company. When used sparingly and with a sense of propriety these tips can be extremely helpful to your company, whether it’s in dire need or not.
Here are our top tips for the modern, ruthless business environment.
Undertake an extensive internal audit. What is being used? What can be jettisoned from your base of operations without being missed in the long term? You may sell some small piece of equipment, only to find that in one year you need it. And in this case, the hire cost may be exponentially higher than it was to buy the piece initially. This is what you’re trying to avoid. It can be tempting to see all of your assets, whether they’re property or Auto Trader plant equipment, as money in the bank. But you should remember that you’re saving this cash for the future of your business. If you begin to save now at the expense of the future, it’s almost certain that you will regret it.
Remember, you’re helping the functioning aspects of your business. You’re not going into administration.
Because you’re not going into administration, you should be able to get more for what you’re selling off. Businesses that have gone bankrupt are forced to sell their assets at a very low cost to meet the remainders of their obligations. You are at an advantage in this regard, as you don’t have to sell anything. You have no time restraints, and you certainly aren’t being legally compelled to sell. Make sure that you take this hint. Shop around in the same way that you would when you buy anything big. See what your assets are worth, and don’t be taken for a fool. Sell to the highest bidder, and understand when you’re being taken for a ride.
Don’t suddenly sell half of your business. This should be a gradual process which adds to the functionality of your operations. It should not result in you suddenly having a crisis as you’ve somehow pulled the ground out from under your own feet. You should be thinking months, if not years, in advance. This isn’t a short term strategy, but if you manage it well, it can be a long term way of steering into the terrible financial conditions.
You should also consider using professional consultants in this regard. With a more objective understanding of your operations, they will be able to spot deadweight from the outside. This can, however, be a costly endeavor which turns out to be more of an investment than a quick fix.
This doesn’t have to be a negative experience. Many businesses could do with shedding some excess weight, and yours is no exception. This is a prime opportunity to diversify your operations, making sure that you move with as much freedom and flexibility as possible in a difficult climate. When you’re thinking about assets that can be turned into cash, you should be thinking about minimalism. They say that perfection does not mean adding more and more. They say it truly means taking away more and more, with everything still working. Once you’re down to the brass tacks of what makes your business run, that is true streamlined perfection. Aim for this, and selling your assets can be a positive and useful experience for everyone involved.
It should go without saying, but it doesn’t. So much of this sounds complicated and difficult, but it really isn’t. This is all a matter of common sense.
If your garage is cluttered, you have a yard sale. A less cluttered garage means you can use it more easily, and the extra cash is incredibly useful for your household. This is pretty much how selling off assets should work. Don’t overthink the core principles.
At the same time, though, you should be ruthless. When you’re having a big tidy up, you have to make some tough decisions about what to throw away and what to keep. More often than not you’ll get rid of something you quite wanted to keep at the time, before realising later that the space it freed up is more valuable to you. Try to think in a similar manner as you work your way through an audit, and try to keep yourself emotionally distant from the whole process.
Plan, Plan, Plan
We’ve said it before, but we’ll say it again. Planning is definitely key here. This isn’t a quick fix for much-needed cash. This is a long term action to be taken over a prolonged period of time. You should spend at least as much time planning as you intend to spend making the cuts and sales, so don’t be afraid of dragging your feet. It is ultimately a very difficult process to master as it requires both subtlety and decisiveness with an emphasis on forward thinking. You may never be truly happy with the results, but with proper planning you will be sure to garner the best results for your business.