If you are an entrepreneur you are likely among most who have determined that their business is successful based only on sales.
RING THE BUZZER….LOUD PLEASE…that’s NOT true.
If you’ve every opened a bank account, rented a property, bought a house, chances are you had to fill out a form, and chances are that likely it asked you, what assets you own. In the finance world assets are often described as RRSP’s, TFSA accounts, Property, vehicles, the list goes on and on. In the business world, there is a whole other list of assets and each of those that you possess hold great value to you and your company.
The following is a break down of what assets a company owner may own.
Land is a long-term, or capital, asset because the business holds it for more than one year. Businesses normally buy land for or with an office, and commercial development. If you have an office space that you work out of, even if it is out of your home, it is still considered an asset to your company.
Businesses rely upon equipment to manufacture products, construct buildings, develop land and run offices. Equipment, may include such items as computers, printers, machines, tools, company vehicles, and cash registers.
Inventory is personal property that a company acquires or makes for resale. These are not capital or long-term assets because the company wants to sell the inventory rather than keep it. Inventory in a company most often includes retail sales products.
Think about what product you have in your shop or warehouse and then by determining what it’s worth you and determine what it’s asset value is.
Intangible assets provide value and rights, but are not physical items. These items include patents, copyrights, brand names, trademarks, computer systems, research, websites, apps and more. Technological and online based companies carry many intangibles. Think about how many revue streams your website holds. Each one of those can be broken down into a different asset for your company.
Businesses maintain accounts receivables for sales made on credit or a promise to pay on a future date, such as 30 days from delivery, or from when an invoice or bill is sent. Even if there is an outstanding balance owed to you, your company registers that as an asset.
A very important asset to consider is your leads. How many acquired leads does your company have. What potential do those leads bring? Each lead has a potential dollar amount that they can equate to in possible revenue. The more qualified leads you have the more assets you have and in turn the more revenue you stand to make in the future.
Other Asset Types
A business shows prepaid expenses as assets for items, such as insurance and rent, that it will use in future times. As the rental or insurance coverage is used, for example, the prepaid expense asset account is reduced and the expense is recorded on in the income statement. Some businesses have financial assets, such as stocks, bonds, currency and other items held as investments; the balance sheet reflects the fair market value of the investments.
And last but not least don’t forget yourself. You are an asset. Your skills are an asset and anyone on your team is an asset. Each skill brought to the table is a useful asset to your company.
No matter what stage of growth your company is in, be sure to consider all assets when determining the success of your company. More importantly remember what it took for you to acquire those assets, all that hard work surely paid off to get you to where you are today. Keep in mind, each one of these assets allows you another tool to help your business grow.