Running a service-based business comes with its unique set of challenges and opportunities. While your business may not deal with physical inventory like retail businesses, fixed assets can still play a vital role in enhancing your company’s performance and long-term growth. In this blog post and video, we’ll delve into the concept of fixed assets and explore how service-based business owners can make the most of them.
Video Transcription
Understanding Fixed Assets & Importance For Your Biz
Hi. Today I would like to talk to you about your business and the purchase of a fixed asset, for your business. What is a fixed asset you ask? Well, it adds value to your business and is at least $2,500 or more and has a useful life over a year. This can be a piece of property, a building. Office equipment, machinery tools, leasehold improvements, intangible assets, meaning you're purchasing a license, a brand name, or a copyright. All of these items, you know, You should be able to either depreciate or amortize in your business over a set period of time. And if you were going to sell your business tomorrow, you would be able to cash out and sell these items as well. So I hope that clears it up and I'll see you next time. Have a great day.
Understanding Fixed Assets for Service-Based Businesses
A fixed asset is a tangible item that your business purchases of at least $2,500 or more and adds value to your business. A fixed asset enhances your business operations, contributes to your business growth, and creates a foundation of stability and long-term success.
A fixed asset can be:
- Land
- Buildings
- Office furniture
- Office equipment (computers, printers, etc.)
- Machinery
- Tools
- Vehicles
These item(s) have a useful life in your business of longer than a year.
Intangible assets examples:
- Software
- Goodwill
- Intellectual property (like a franchise, a brand, a patent, and/or a trademark)
Tangible fixed assets are depreciated whereas intangible assets are amortized in your business. These items have a monetary value and can also be sold for cash if you were to sell your business.
How Fixed Assets Add Value to Your Service-Based Business
- Enhancing service delivery: Utilizing advanced equipment and tools for better service quality or implementing efficient software to streamline operations and improve overall customer experience.
- Boosting productivity: Providing employees with ergonomic furniture and comfortable workspaces or using automation tools to optimize routine tasks and reduce manual workload.
Fixed assets may not be the first thing that comes to mind for service-based business owners, but they can significantly impact your company’s success and financial well-being. By understanding the value fixed assets bring, strategically managing them, and planning for the future, you can leverage these assets to elevate your service-based business to new heights. Embrace the potential of fixed assets and use them as a powerful tool to enhance your services and secure your business’s future.
And if you need help to get your books in order, book a consultation now.
