Why you need to remember the figure of one third…
The buyer of used cars who you see advertising on TV all the time – you know the one, with the ladies’ favourite TV presenter and cuddly kittens – offer you peanuts for your car, their business model depends on buying cheap, putting a lick of paint on and then simply selling your car on. They rely on the public being idle, time poor or not bothered about maximising the cash they get for their cars. It’s hardly rocket science, and although you would think you’d have to be pretty silly to sell to them, so many people do that their CEO is picking up a cool £30m a year. Not bad for someone who relies on Joe and Joanne Public’s stupidity/idleness/lack of focus on cash.
But this is a business focussed social media, and all my contacts own or work in engineering or manufacturing companies, what this got to do with you?
Well, remember the figure of one third? It’s the model used by used machinery dealers. Unless he has a ready buyer right now to whom he can back to back a sale of your used machinery he will pay you a maximum of one third of what he’s likely to get for it when he sells it on, because their model of 1/3rd cost; 1/3rd transport, storage and refurbishment costs gives them a one third profit, if all goes well, it really is not dissimilar to the model of the used car buyer.
I say a maximum of one third because often circumstances – for example you need to clear the machine out of your factory and you’ve left things late – will mean he’ll take advantage of you and pay you far less, often just above scrap value, because he knows that you just have to get rid, you have few options. But do you? Do you really have few options?
But unlike Joe Public, you’re in business, and being in business is all about continually generating cash from everything you do, including managing your business’ assets and finances better than Joe Public does.
Why not make managing your machinery assets better your New Year resolution?
Why not download our paper on Rolling Asset Disposal Plans by clicking here? – it could be the blueprint you need for managing your assets better. Share it with your colleagues, get them talking about it, working together, use it to bring structure to your asset disposal, use it to generate more options and cash, and at the same time reduce your asset disposal headaches. And if you’d like any help along the way, feel free to contact me, our phones are always on and with us the clock doesn’t automatically start ticking.