Operations Management: Monetizing Your Assets

Most entrepreneurs do a good job of coming up with a business model, the primary way that the company will make money. For example, Sec Outsourcing makes money by providing compliance solutions in exchange for a fee. But identifying and executing the business model is Operations 101. It means the business is viable, not that it is well-run. The secondary or sophomoric task is to produce the product or service more efficiently. Here, the focus is on cost, in money and in time. Can we do it cheaper? Can we do it faster?

However, after your business is out of survival mode and turning a profit, it is time to ask another question. How much money are we leaving on the table? The real value of a COO is to fully monetize the company’s assets by generating ancillary revenue streams. If you have been in business for a couple of years, you’ve acquired and/or created some assets. I’m not talking about desks, chairs, and computers. Those things may be assets on your balance sheet, but they don’t have any real value unless or until you sell them or the business.

The assets that should be monetized are the revenue-generating assets, and there are 3 steps to monetize revenue-generating assets. First, make a list of your revenue-generating assets. Second, identify the needs and wants of your stakeholders. Third, determine the steps and budget required to implement each revenue stream.

1. List Your Revenue-Generating Assets

I divide revenue-generating assets into 4 categories: Intellectual Property (IP), Systems, Facilities, and People. IP means intangibles that you create or control. Examples of IP include patents, trade secrets, your trade name and logo, and any copyrights you own. “Systems” means the way you do business. The way you produce your product, market your product, and sell your product all have monetary value. “Facilities” means space that you control or can use. And “people” means the stakeholders, human and organizational, in your business.

2. Identify Needs of Stakeholders

Using my own company as an example again, I asked questions like: what products or services (other than outsourcing services) do companies need in order to comply with federal, state and local regulations. For example, do they need industry updates? Naturally, we make industry updates available to clients for free, but perhaps we could provide them to non-clients as well, in the form of a subscription service, for example. Another question I asked was: what products or services (other than compliance services) do clients need in order to run their businesses. A natural companion service to our compliance solution is legal representation before regulatory bodies, courts and arbitrators. The third question I asked was: what products and services can we provide for the convenience of our clients that are incidental to the primary compliance services we offer? Regulatory filings must be delivered on digital media. We can buy it at bulk prices and resell it at the same price that a retailer would charge. Finally, I asked: what other businesses need my assets in order to run their businesses without directly competing with me. A gadget-laden conference room with a great view can be sublet to tenants in your building for a fixed daily or hourly rate. The fact is, there were many responses to these “stakeholder-needs” questions, and each response was a potential revenue stream for Sec.

3. Implementation Steps and Budget

However, not every revenue stream identified should be implemented. Before you implement a revenue stream determine what resources will be necessary to go from not having the revenue stream to having it.  If it will cost too much in terms of human and financial resources, then it should not be implemented. However, if the stream can be implemented at a cost that is a mere fraction of the projected revenue from the new source, then it is your job as the operations executive to ensure that the company doesn’t leave that money on the table. Subscribe to our blog.

Sec Outsourcing offers an onsite revenue enhancement workshop to career schools to help them monetize their assets and run their businesses more like traditional schools. Tweet