The POTENTIAL V: Assets, Liabilities
Potential is life; and life is potential; since potential is the ability to be and to do. Life is itself a collection of cells, after all, the cell is the basic structural and functional unit of life. A cell is that device that converts (inherent) chemical energy into electric charge – even the biological cell generates charges: phosphates, in ATP and DNA, for example.
The fuel cell, like solar energy from the Sun, itself a mega cell, is the future – at least for transportation. Therefore the cell, like each of us, has potential: The potential of a cell, a battery, is a measure of the (electromotive) force acting across its terminals; it is the force experienced by a unit charge as it moves from one pole to the other.
The cell, like everything else with potential, has assets, raw materials, and liabilities, wastes. For non-rechargeable cells, the waste clogs the system, hinders the reactions, stops power generation, stops productivity– and usefulness; now you know why your wall-clock or torch battery leaks water in the long run. For rechargeable cells, passing current in the reverse direction undoes the hindrance of productivity by forcing precipitates back into solution, liabilities back into assets.
At this juncture, I consider it rather repetitive to again say every business has potential, and rather instructive that I say that, like every cell, each business has assets and liabilities, and that businesses run down when liabilities clog the system, when the point of rechargeability is crossed. And rather than agitate words and prove theorems like I did in The Profit PERCENT, I shall simply share a common scenario and hope you sift the grain from the chaff:
Mr A started a business and in a short while he hit jackpot. What should he do with the proceeds? Most people would agree that that money ought to be spent; the dichotomy is invariably in how! (Yes, a few people would advocate saving and seeing how the business next fared.)
Of those in support of spending, some would suggest he pay himself for his time and effort and sacrifice, that he share his good fortune with family and friends, that he spread the wealth, that he buy an automobile to feel among..., maybe even marry (another) wife, or build (another) house.
Some would suggest that he reinvest the money, that he put it back into the business.
I would not suggest any of the aforementioned options, however, and this is why:
Commonsense suggests that Mr A not spend the money needlessly. Need I say more? What happens if the market crashes? What happens to having a little savings, a little back up? As Jesus said, a wise man builds on a rock in anticipation of the storm; a wise man keeps money in fishes' mouths.
In modern times, markets are ever dynamic, a factor that continues to produce Recession after Recession. That the market is profitable today does not speak for tomorrow: anything can happen; the future is not writ in stone.
If Mr A invests his profit in his business, he will increase his stock, but not likely his carrying capacity. This of course will affect his business. Cramming goods affects presentation, appeal, marketability, as well as shelf life and durability.
But whether or not that happens, this is sure to: More people will flock into Mr A's business. (Who doesn't like a profitable business?) Consequently there will be a glut: supply increases, prices fall, and profits crash, just when Mr A has increased stock! Lóbátán!
Hence, there is no doubt that Mr A must keep his money. But how? In hand, in banks, or in something else?
As a bird in hand is worth more than two in the bush, is cash in hand worth more than bonds and cheques, bank drafts and promissory notes, in emergency and especially in robbery. (The latter case however may be one reason to be cashless.) On the other hand, while cash in banks is safe, it does not appreciate as such, and can easily be trapped. Ever queued at a bank or an ATM point?
In essence, Mr A should keep his profits in a venture that is secure, that appreciates over time, that can be easily converted into cash or used as collateral. And that, more importantly, can be useful to him (and his business) in future.
A car is what everyone thinks of first. The first "asset" Father had was a car, for which he paid dearly in envy and rents – and, of course, cars depreciate. (And just before you laugh, please be reminded that he remains the best businessman I know.) He subsequently kept me off his cars, the best thing he did for me asides education. (Now you may laugh: at moi.) The rest is history, story for another day... Maybe in the next article in this series, The POTENTIAL VI: The Way You Eat Your Mango.
That said, the only venture that comes to mind is LAND. And that to me is the ultimate asset...
Yes, that business can yet be salvaged if you will treat it as a rechargeable battery, pass life into it and see it revive: Break forth, stay within limits, mind your own business, and stay true to purpose. If you will build assets and part with liabilities, and see your business thrive.
Catch my drift?... Assets; not liabilities, not luxuries, not cars. And you may even buy for two; you and me nooni, I need it just as much as you do.
Why land? It secures the future. It makes for a good collateral. It appreciates over time. It is not commonplace, not replaceable, not destructible. It is the future.
Of course, there are rules pertaining to where and how - and where NOT - perhaps in a future article (if) prompted by popular demand. However, suffice it to say at this time that one must get his documentations right, and NEVER forget to hire a good lawyer - his commission will never kill, it merely makes you stronger.
For legal aid, contact me; I happen to know just the lawyer for you.
#Youths, Save Nigeria. Start businesses. Acquire assets (and no forget me o). It's our turn!
Ayokunle Adeleye.
Sagamu.