CFO2Go Blog

Selling the unexpected
Finding hidden assets could save your business

So often in a business we sell what we sell, meaning the product or service we produce or acquire. In business, we need to look beyond the traditional model of products and services in these tough times and look within our business to see what we may have missed that can bring value.

In a recent engagement with a client, it was obvious they were struggling financially and doubtful if they would make it through this recession. We did all the things you do in a business to survive — increased sales calls on specific customers, cut costs where appropriate and resized to support the current level of sales. We also deferred bonus and salary for the CEO and cut and froze staff salaries and benefits.

Once the usual list was exhausted, we still had more work to do. So we renegotiated our outstanding debt with our major vendors. Even with all this effort, if the economy does not pick up the company still has a substantial debt load that needs to be addressed in the future.

Next we started looking within the business for a different solution. We discovered that over the last 30 years the company had gathered valuable information including drawings and programs to produce tools for specific customers. These items were long since expensed and the value of the drawings was never captured on the balance sheet of the company.

We held a brainstorming session with the CEO and key staff to explore ways to leverage these assets. We realized that the drawings and programs were of value to vendors we had in our industry in Korea that provide tools to customers in foreign markets we do not serve.

Outcome: The company is now discussing the sale of the drawings and programs to Korean vendors. Leveraging these assets could potentially provide the needed capital to pay the extended debt.

Tip: Look around your company for those hidden assets – they could save your business.

The new buzz these days is to “go green”.  We at CFO2Go agree that “green is good”.  One way to move your company to the green is to eliminate month end statements if you issue invoices for good/services.  If an account is delinquent, pick up the phone instead of sending the statement.  Any good accountant is not going to pay from the statement so by calling the customer, you:

1. Let the customer know you are watching the account
2. Can verify that the customer has received the invoices
3. Determine if there are issues with the goods/services provided, or, the ability for the customer to pay thereby giving you the chance to establish payment terms
4. Saves paper, stamps, office admin time, etc.

By “going green“, you can “collect the green” and keep your business healthy.

I have been requesting that one of my clients “shop” his medical insurance with other carriers to see if there was an opportunity to save some premiums.  Each year, he “didn’t have time” and his agent was “taking care of him”.

When the policy was coming up for renewal late last year, I again suggested he shop.  This time he did and discovered he would save over $28,000 in premiums this year and provide better coverage for his employees.

Moral of the story: Keep your agent honest by checking out other options elsewhere. Don’t let them become lazy on your behalf. Also, take advantage of any programs offered through associations that you may belong to. These organizations can sometimes provide better coverage at lower rates due to the age group of the census.