A Mini Guide To Asset Management For New Small Business Owners
A business can have assets of all kinds, from human capital to actual inventory, to their accounts receivable and the real estate their headquarters can be found in. So many different moving parts make up your total assets, and trying to manage all of them in turn can be an incredibly complicated thing.
After all, each asset is going to have its own value, its own risks to assess, and various issues that crop up over time as the value degrades or grows exponentially.
When you’re new to the world of small business, this is going to sound like a massive mountain to try and climb, and you’re probably completely without the tools you need to get on with the journey.
So it’s clear we’re in need of a mini guide to asset management here! And that’s what this post is for; the more you know about managing the value of your company, right down from the smallest of intangible details to the very obvious equipment you’ve had to invest in, the more likely you are to thrive.
Determine What Assets You’re Holding
You can’t look after your assets if you’re not even sure what assets you have. You may have a good idea of the inventory you hold and the equipment you use, but are these the only things that fall into the asset brackets? Probably not, and that's something you need to be more than aware of!
If it’s an investment, and it could make you money one day, it needs to be considered an asset. You’ll have different types of assets to be aware of, but you need to be aware of all of them before you can make good use of them.
Make sure you’re aware of any ‘current’ assets you hold. These are usually defined by the ability to liquidate them into cash within a period of 12 months from the current date. Any asset you’d need longer to turn into basic financial value is a ‘fixed’ asset, which can be worth more, but are always harder to turn to when you’re in a pinch.
Once you’re able to split your various assets into these two columns, it’s time to start tracking them properly.
Track Your Assets Over Time
Now you know what you’re working with, it’s time to track each asset and ensure you're aware of how it’s changing over time. The revenue you pull in is an asset that’s going to change on a regular basis, as it informs what level of capital you have behind you.
You’ll always be able to access these funds as and when you need to, and that makes them one of the most important assets to have a good handle on.
But seeing as some months are better than others, there’s a chance your background funding and savings will go up and down. You may wish to accelerate the growth here by investing, but you can also keep things low key and to a minimum in the first few months of running your business.
Thankfully, you can make asset tracking much easier via use of specialist software. Input all your assets and the relevant details into the system, and the program will turn all of your data into one easy to use breakdown, graph, or spreadsheet.
You can also benefit from the use of an access-all dashboard, where you can hop back and forth between your assets and how they currently stand. Before you download anything though, look into your software options here, and try out as many free trials as you can to find a version you’re truly happy to make use of in the long term.
Keep an Eye on Your Asset Needs
The assets you hold are going to have various upkeep and maintenance needs. Your office, for one, is going to need to be kept clean and safe over time. You can’t work to a productive standard surrounded by filth, and you could easily have a lawsuit brought against you if you don’t take care to prevent hazards.
A similar principle applies to any company cars you have, or the fleet you might manage as part of your work. You’re going to need a high level of cover for company-owned vehicles, to ensure any employee out on the road is safe in case of an accident, and is able to remain a positive representative of your business.
And then we come to something like your product or service. This cannot remain the same from the moment it’s first drawn up to the moment it hits the market. You need to develop your idea to the point where it becomes a solution people are willing to pay for.
Once it’s hit the shelves and is publicly available, you’re going to need to reform and redesign it over the years to ensure it stays relevant in the eyes of your customer base.
All in all, simply tracking your assets won’t be enough to take care of them. You need to be on top of their needs as well; there’s a lot to lose when you don’t take value conditions seriously!
Hire a Specialist
Sometimes you’re just not the right person for the job, and asset management is one of the most common places where this applies. As such, it may be best for you to hire an asset manager or even an accountant to track and control your assets for you.
If you’re worried about the cost of hiring a specialist like this, remember that the person you hire doesn't have to be a permanent employee of your business, and you’re more than welcome to contact a freelancer who has the time to take a bird’s eye view of your business as a whole.
If someone else can take care of the assets while you run the business, you’re going to have a much easier time of getting your company up and running and into a successful position. You won’t be bogged down in the details, and you’ll have a lot more free time on your hands to focus on the things you do have the skills and experience for.
Forecast for the Future
Knowing how to use your assets when the time comes is crucial. That’s why you need to forecast your finances from right now to the end of the year at least. Make sure you perform a financial forecast like this at least once a year too.
You need to have a good idea of where the ups and downs are likely to lie, and you can use previous market research within both your industry and niche to discover the trends you’re most likely to be affected by.
Get Your Head Around Asset Management
Asset management can be a mixed experience, especially if you have no qualifications in running a business thus far. You’re putting together one of your own, of course, but you’re otherwise new to operating a company. Being in charge is more than calling the shots - it’s also knowing what shots you can call based on the resources you’ve got behind you.
And that’s what asset management is good for. You can use it to stay on top of both your current and fixed assets, figure out the true value of the business you’re holding, and track your financial capabilities month after month. Getting your head around this bank of skills will put you in prime position to make a success of your business goals.
