The key assets your new business will need
When starting a business there are a few certainties: you’ll need capital, you’ll need staff, and you’ll need assets.
You may think that your one-of-a-kind technology startup doesn’t need any of that in the beginning, but at some point, it will.
And it’s better to start thinking about and preparing for all of these needed items now, instead of when you’re ready to start the company.
What is an asset?
To put it simply: assets are necessities in your company. They are pieces of ‘equipment’ that the business cannot function without. And assets are either fixed, moveable, or non-physical.
Think about all of the items that your company needs in order to work correctly. You’ll need a computer, software, an office, and maybe even some machinery. Each and every one of these is an asset.
Your computer and desk would be classified as movable assets as they can be moved and aren’t ‘nailed down’. If you own an office, factory, or piece of land for the company, that is then a fixed asset, while your expensive package of office or accounting software is an intangible asset.
The key assets your company needs
Taking into account some of the previous examples, here are all of the assets that your company may need:
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Office equipment: At the heart of every office may be the leader, finance or sales team, or the secretary, but they’re also only as good as the equipment they have. Each and every staff member will need their own computer, desk, and office chair. And (usually) a licence for an office suite package. All of these costs add up and only increase as you hire more employees.
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A building or land: This doesn’t apply to each and every company. After all, quite a few businesses can get away with renting an office or even working out of a garage or shared-space. But for the manufacturing, production, and agricultural sectors, it’s a necessity. You’re going to need to purchase a building or a piece of land to build on. Chances are you won’t be able to afford it in the beginning and will need to scout out different asset finance companies in South Africa.
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Patents: Are you building and designing something unique? You’ll want to patent that product as soon as possible so that it cannot be copied. Another example of something that can be patented is the programming code of a product or a chemical formula. Of course, your competitors may create their own, but they’re not allowed to use yours.
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Vehicles: The majority of companies will have a company car. It’s geared towards driving staff around, attending meetings, and can sometimes be a show of business wealth. Logistics-based businesses, such as couriers, will need to have a fleet of couriers. This asset will be far more important than that of office equipment, or sometimes even a warehouse.
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Industrial equipment: Manufacturing and production are massive industries in South Africa. Each of these companies needs to have their own set of equipment, whether they purchase it locally or import.
Financing your assets
You don’t have to pay for all of your assets upfront. Instead, you can look at asset management solutions. While they may sound similar to banks – and some of them are banks – they will be able to help finance your assets and offer you a range of payment options. In fact, a lot of finance solutions are similar in style to a typical bank loan.
There are two key types of asset finance you will need to be aware of. The first is instalment, which allows you to pay off the asset over time. Once the payment is completed, the asset is yours. The second is a lease agreement, which is used for assets that require regular replacement. The business will lease these items and pay them off, with the option to buy them when the lease is up.
Regardless of what you need to start your company or which sector you’ll be in, by creating a concrete business plan and being realistic about what you need, you should be able to find finance for the business.