Accounting for your most important business asset

If I asked you what the most important, most productive, most vital asset was in your business, what would it be? I suppose a landscaper might say his pickup truck, an accountant would suggest their computer; a call-center might say their employees.

I would suggest that with any business, the most important (and most overlooked) asset is the business itself.

Technically a business isn’t an asset, because any CPA will tell you that in accounting terms, it’s the equity on a balance sheet. I get that, but my point is that most of the business owners I work with are thinking about the day-to-day operations, cash-flow, profitability, etc. They rarely talk about how to improve the value of their business. It doesn’t happen automatically. It does require a strategy and conscious effort.

Some day you’ll want to stop working, close the doors and move on. It would be a shame to simple cease operations and go home, without cashing in on the value of your business. But in order to do this, you’ve got to build something of value. There is always a ready market of investors that are interested in buying a business, as long as it has sufficient cash flow to pay back their investment.

The beauty of improving the value of your business is that by doing so, you’ll also be improving the profitability and cash flow. It’s kind of like getting a house ready to sell, by making some modest improvements before you put it on the market, you’ll increase the value and appearance of the house and ultimately the selling price.

Consider what you think your business is worth and contact me if you need help improving the value.


Posted in: Blog

Leave a Comment (0) ↓

Leave a Comment