The Flesh and Spirit of An Online Business
Some entrepreneurs, especially the ones who are just beginning, can’t help but think that all they need is money and their product in order to start a business. However, those who have more business sense see that a company, no matter how small it is, is made up of more than these two things. They realize a business should be founded not just on cold cash and a good product—it should also be built around the right gear, both physically and otherwise.
If you’re looking forward to setting up your own business or Online Enterprise and are now preparing a checklist, here are the tangible and intangible assets you need to make to ensure your business’s feat.
Investopedia defines tangible assets as properties that have a physical structure. These kinds of assets pertain to both current and fixed assets and include your merchandise, your funds, your equipment, and even your office space. In order to supervise the quantity and value of tangible assets, you need to hire an accountant to do your bookkeeping. Another job performed by accountants is by depreciation, a process where instead of allocating an asset’s expense to a full year beginning the date of its acquisition, the expense is allocated to every year that the asset would still be useful.
Aside from the fact that these assets make everyday operations possible for a business, they also influence important transactions the company needs to make. A perfect example would be when you need to make a loan to finance your imminent expansion. Some banks and finance companies require business owners to present their company’s net worth as proof that they can pay back the loan. In short, your tangible assets can serve as your collateral.
To shed light on what exactly tangible assets are, here are the most basic ones you’ll expect to procure when starting your own online business.
Covered in this area are your capital, revenue, and profit. Remember that every penny that comes in and out of your funds should be accounted for the in the books to avoid confusion and unnecessary losses.
- Products and Raw Materials
these refer to the merchandise or services you’re selling, as well as to the materials that were used in the production of execution. Just like money, the quantities of these things should be recorded properly.
- Workspace and Storage Space
considered a fixed asset; the spaces you rent or lease for operations and storage are also part of your tangible properties. However, keep in mind that there are businesses that do not require for you to have a storage room at the ready. Some online entrepreneurs simply operate in the comforts of their own home by converting an old room to an office.
- Equipment and Furniture
The equipment, machinery, and fixtures you will buy and use for your business is counted as an asset. These are examples of assets whose expense needs to be allocated to every year that it will be of use.
your labor force, yourself included, is also part of your business’s tangible assets. Every employee is a physical unit who performs a function essential to the entire production process.
If tangible assets are the resources which you can quantify, intangible assets are not characterized by physical form. Instead, they refer to the assets that can’t be liquidated such as skills, copyrights, patents, business strategies, and other nonmaterial properties of your business.
One way of looking at intangible assets is that their value is hypothetical, at least to a certain degree. However, this doesn’t mean that they have lesser worth than tangible assets. In fact, many businesses consider their intangible assets invaluable because these are what set them apart from their competitors. If you think about it, any company can produce its own goods, equipment, machinery, and building but it’s their intangible assets that truly give them the advantage to best their competition.
Here are some examples of intangible assets and how they factor into the overall framework of a business.
- Knowledge and Skills
these refer to the specialties and the know-how you and your employees possess that is unique to your operations. Whether it’s a tried and tested production technique, a fairly modern business approach, or a century-old secret recipe, they all fall on this category.
The scalability of your business is determined by its ability to handle, accomplish, and deliver efficiently despite increasing amount of workload. A scalable company is one that is able to sustain high quality of their products and services despite regardless of the increasing volume that is demanded from them.
- Brand Recognition
Now this is definitely not something you’ll be able to liquidate but you know how invaluable brand recognition is. But since you’re just setting up, you would need to put in the hours first before your brand is under the spotlight. One of the benefits that await you when you finally earn recognition for your brand is that you wouldn’t have to resort to hard-selling anymore. Your name will be able to sell itself, and best of all, you will have the liberty to share a much more meaningful message more than you have to promote your product.
- Right Attitude
Skills and competencies may make you run fast, but it’s the right attitude that will get you far. Entrepreneurs and their employees are expected to do their job well by learning the ins and outs of the business. However, doing everything else while showing upright behavior is equally indispensable. When you’re able to instill this within yourself and your staff, you wouldn’t have to worry about the quality of work, service, and interaction you will make with each other as well as with clients.
- Relationship with Clients
Your relationship with your clients is among your most precious assets. This asset is founded on trust, so it’s crucial that you take care of it by providing them your best products. It’s also vital that you keep your relationship with your business partners in good standing. These include your suppliers, retailers, and even your affiliate marketers.
The road to being a successful entrepreneur is not all about raising enough money to kick-start business, but if you make the correct investments, you won’t regret a single buck you spend.