Every asset of the business will provide some value and benefit to the profitability and productivity of the business...
although the onus will fall upon the business owner to ensure that the various assets are exploited to their maximum potential.
The degree of success which the business owner is able to achieve this process with will directly determine the fine line between ultimate success and failure.
One manner in which the assets of the business can be used to aid the company as a whole is where they are used as leverage/collateral in order to secure additional financial support and input from the lenders such as banks.
However, the lender may impose rather draconian rules concerning the usage and security of the asset that has been secured as collateral and specifically, the lender may wish to protect against the onset of depreciation.
The reason that this is significant is due to the fact that it will mean that the business owner maybe effectively restricted from even using the asset at all.
Furthermore, only a certain proportion of the assets of a business can ever be secured as collateral, and so if the business already has several assets secured in this manner, then additional lenders maybe unhappy and unwilling to actually agree to a loan agreement simply because they do not have any unencumbered assets for security.
The business may wish to consider the issuing of shares, as this will be a quick and fairly painless way of acquiring additional capital.
Unfortunately this is not a business financing method that is accessible or appropriate for all types of business, and so a partnership and sole trader will be excluded from using this approach.
Another problem with the issuing of shares is that the more shares that exist, the less money that the business will receive for them, and so in effect then, the value and effectiveness of this method will be diluted with time.
In addition, the business will also have to contend with the fact that the shareholders will actually have the power to influence decisions that take place within the business as a whole.
This can pose further logistical difficulties as the business owner is forced to contend with the power of veto possessed by the board of shareholders.
It is for these reasons that the receivable financing company has been a business model that has increased in popularity by a significant amount in recent years.
With a receivable financing company, the business owner will be able to enjoy the comfort and peace of mind knowing that they are able to acquire significant amounts of capital without diluting their profit margins or level of control.
Furthermore, the receivable financing company will also assume responsibility for the collection of the money owed by the customers concerned, thereby further ensuring that the business owner can focus solely and exclusively on the running and management of their business.
In turn, this will help the business to better handle and downscale the expenses of personnel.