Why An Asset Heavy Business Is Actually Better Than You Think
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Learning a TON right now, wanted to share this with you:
3 reasons that having an asset heavy business is a good thing:
I’ll start off by saying that when I first thought about assets that a business has, RISK came to mind.
- Risk of heavy machinery
- Risk of liability
- Risk of having to operate said machinery
But I was wrong. In short, assets and inventory of a business are actually a benefit.
Check this out:
You can depreciate the assets and get some major tax benefits by performing a cost seg study after purchase. Basically accelerate the west and tear of the equipment so that you can absorb those benefits sooner
Lenders like assets for financing. Essentially it makes them feel better if there are assets they can sell off if you can make the loan payment. It’s a fail safe for them.
If it’s a company that has a lot of assets, it makes it harder for others to start a new company and compete with you. It’d be too expensive.
In summary, as you search for your first biz to buy, don’t be turned off by one that has several hundred thousand worth of assets and inventory. It can be a good thing.
