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.