Mothballing your business assets

Source: Other | | 23/09/2020

Mothballing as used in a business sense is usually defined as to stop using a piece of equipment or process, and then storing and preserving mothballed assets for later use.

Many business owners are now faced with marshalling their resources in this way.

There is a temptation to sell off assets that are under-utilised due to the present COVID disruption. If assets are readily converted into cash this sell-off process could make a welcome contribution to cashflow. Mothballing your entire business is another matter…

If you could stop trading and place all of your business assets – including your work-force – into hibernation, then perhaps you could close your doors and wait-out the coronavirus epidemic.

Unfortunately, most businesses have significant costs that cannot be cancelled. These fixed costs, for example rent, rates and insurances, will need to be paid even if you are closed for business. But, for those businesses that have limited fixed costs – say businesses run from home – mothballing may be a way to protect your business from extinction while you find other paid-for work to tide you over?

In this way you could reawaken your “sleeping beauty” business when we can once again contemplate business life without the concerns of lock-down, masks and social distancing.

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