Posted by Author: Florian Wierzchowski
A very important question that anyone intending to start a business should ask themselves is what assets they have. Assets are tangible and intangible resources that make it possible to earn, i.e. generate revenue. The question therefore resounds: “What do I have that I can start operating with to start a business and make money?”
Tangible assets are, in the simplest terms, tools and materials with the help of which, by doing some physical or mental work, tangible (products) or intangible (services) goods will be produced. They can be real estate, machinery, equipment, vehicles. Examples of tangible assets in a carpenter’s shop that produces products such as tables, chairs, cabinets or stairs will be suitable rooms, saws, chisels, milling machines, lathes, sanders, glues, varnishes, wood for processing. Assets will also be finished products or goods for sale. Examples of tangible assets in a company providing services, for example, in a hairdressing establishment will be hair dryers, chairs, mirrors, scissors, razors, rooms, etc., in a cab company – cars. These are the types of assets that will be reflected in the balance sheet of any company. In a trading company, the basic assets will be goods purchased for resale, there may also be a warehouse and means of transportation.
As for intangible assets, they are most often mentioned in the context of patents, utility property rights, copyrights and licenses, because the Accounting Law allows them to be included in balance sheet assets. However, there is still a group of very important, if not more important than the previously mentioned intangible assets not included in balance sheets. These are people, knowledge, experience, reputation, know-how and contacts (acquaintances and relationships).
When proceeding to consider the necessary assets, you need to identify what resources will be necessary to achieve the company’s stated goal, i.e. what you need to make things happen in the company. How to do this?
First of all, plan what processes will be carried out by your company. Which resources will be needed for customer acquisition, which for sales, which for manufacturing a product or service, which for support processes – accounting, administration. Then you need a decision – which processes will be carried out in-house and which will be outsourced. For example, if you will be distributing products yourself, you will need a car, but if you will outsource the distribution to another company, the acquisition of a transport car will be superfluous and money instead of a car will be spent on something else, such as computers. If you will be in-house bookkeeping, then you will need an accountant and a license for accounting software, if outsourced – a contract with an accounting firm.
It is best to make a list divided into two parts, according to the type of asset needed. Let one part be the assets you need to have at your company’s disposal within your own resources, which you will control. The other part is assets that you can rent or use under contracts with other market players. Describe for yourself exactly what you will use these assets for.
And now for the most important. Some of the assets, and the most important ones, you already have when you think about starting a business. First of all, you have yourself, with knowledge, with an idea and initiative, energy, competence in certain fields. Probably, if you weren’t born yesterday, you also have some acquaintances and developed relationships, a personal brand, and a developed reputation. Inventory these assets for yourself too – list and describe them to yourself in detail. This is very important and will be useful to you later. You will acquire the rest of the assets one way or another. And how? I will write about it in the next posts.