Posted by: Danielle Moore at October 05, 2022
This environment of high inflation, slowing growth, and tightening credit, is challenging. It may also be the ideal time to look around the corner and set yourself up for the next economic wave.
While it’s prudent to reduce your exposure and eliminate risks, here at Rebus we believe there’s more often opportunities not yet realised, and encourage our clients to think laterally and flex with the times.
With this in mind, we believe now is the perfect time to review your asset register, potentially unlocking equity hidden in your balance sheet. This may be an simple way to inject some much needed cash back into your business.
According to global consultancy Bain & Company, the machinery and equipment sector has been one of the most active industrial sectors since 2010. And ABC News reports that second-hand vehicles and machinery are selling for record prices as wait times balloon for essential equipment across multiple industries.
While many of us think inflation is an evil that pushes up prices, that can, in fact, be a good thing for the value of your equipment. That’s why now is a good time to take a look at your balance sheet and assess where you’re at.
During your discovery, you may find that the profit you could generate from disposing of an asset will be far greater than keeping it in use. For example, you may have an excavator that’s paid off, but you haven’t thought how to redeploy it in a better way to ensure your business’s future growth.
Releasing equity from asset sales to fund growth will require an analytical look at the returns you’re getting from your investments in plant and equipment. Specifically, you need to look out for any under-performing or non-core assets that are detracting from your business growth and performance.
These assets can be sold or repurposed, freeing up cash that can be used to fund more valuable activities or purchases.
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