Understanding and protecting your small business’s assets

Business assets, much like personal assets, take on many different forms. Protecting them is necessary for the longevity of your small business, but it can be difficult to determine what exactly your assets are and how to secure them.

Two main categories for business assets

From cars and equipment, to cash and patents, even the smallest of businesses can have an abundance of assets. As the Small Business Chronicle explains, as asset is anything of value to an enterprise. They help keep a company afloat, can be sold when cash is needed or used as collateral during expansion.

To categorize assets, they must meet criteria that can fit within one of two molds:

1.Tangible: Anything physical, including buildings, vehicles or equipment used for operating your business fall under this category. They can be uncomplicated to account for because their monetary value can be easily assessed.

Furthermore, tangible assets can be classified as either fixed or current. If an object, like a machine, is used in the business, its value will naturally depreciate over time so it would be documented as the former. Due to their size and function, they cannot always be sold effortlessly in times of need. Current assets, like available inventory, have a cash equivalent and can be sold immediately for financial compensation.

2. Intangible: On the other end of the spectrum, anything that is abstract would be considered an intangible asset. This can include your business's reputation, any acquired industry-specific knowledge and brand. They are not liquid, as it is difficult to determine their monetary value, though they no doubt add worth to your business.These assets are harder to protect because of their bodiless nature, but are sometimes considered more important than physical assets in terms of profitability.

Another important contribution to this classification is intellectual property. Though sometimes categorized on its own, it's a variation of an intangible asset. It can include anything from trademarks and patents, to logos and secret formulas. Intangible assets give your small business a competitive edge.

Cash is one of the most important assets to a company, but so are things like equipment and branding.

Legal help can be your best option for protection
By understanding the sheer amount of assets that exist for your small business, it can seem nearly impossible to protect them all. This is where a combination of strong internal practices and legal help comes in handy.

An attorney for business can help protect both your tangible and intangible assets, including intellectual property. Through many of the fine details of asset and liability protection comes down to what kind of entity you own, a lawyer can help define your business's strengths and the best channels to protect them.

In the case of intellectual property, receiving copyrights and trademarks are necessary. For physical assets, being aware of their liquidity and how much they will depreciate over time will help you in forming financial statements.

Additionally, a business lawyer can assist you with the due diligence of making sure your specific idea or practice does not already exist. If it does, it's not a reason to cease operating, but is a precaution to make sure you will not infringe upon any of protected copyrights or trademarks that already exist.

Cyber attacks are the new threat to business assets
While business lawyers are extremely helpful, they cannot be responsible for all your assets. Cyber attacks that target a business's intellectual property, like trade secrets, have become increasingly prevalent, reports Forbes. Making sure your small business has strong internal systems to prevent the loss of these resources is a must. If you store valuable information online, such as through a cloud network, make sure it's configured correctly, password-protected and constantly evaluated for weaknesses.

Comprehending what your business assets are, and how to protect them, is the best way to ensure continued success for your established company and is a solid foundation for any hopeful entrepreneur to begin. An attorney for business can assist you in navigating starting an entity as well as protecting your tangible and intangible assets.

Categorised in: Asset & Liability Protection, Intellectual Property Law

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