Small business owners are known for juggling projects, doing multiple tasks at the same time and rarely having enough time in the day to do everything they know they should do. This results in many items getting placed on a to-do list that rarely receives attention. An asset inventory is one of those tasks.
So why should a business owner have an inventory of all the personal property they own?
1. Be Properly Insured
As the business grows, you often add assets without paying much attention. A laptop here, a new printer there and before you know it, you’ve increased the value of your assets. There are a large number of desks, chairs, printers, cameras, file cabinets – the list goes on – that are expensed. This means they aren’t on a depreciation schedule; therefore, these purchases aren’t listed anywhere.
Creating an inventory list and updating it annually or as you purchase items will help make sure you are properly insured. The asset list will show you the value of your personal property, thus knowing how much your insurance coverage should be.
2. Recover from a Disaster with a Maximized Claim Settlement
Your asset list helps you remember what you owned (and the photos will prove ownership), thus assists you in filing a maximized claim. Since you already have this list, you’ll be able to file your claim quickly. This enables you to purchase new furnishings and equipment quickly so you can get back to doing business.
3. Storage – Prevent Duplicate Purchases
If you don’t have a list of the items in storage, you’ll most likely forget what you own. This can cause duplicate purchases, resulting is unnecessary expenses. A business owner purchased over $2000 worth of furniture, only to find that he had the exact same items in a storage facility. Your inventory list will prevent these unnecessary expenditures.
4. Personal Property Tax Return
Unfortunately, many business owners guess at the number they report on their personal property tax returns. The inventory will enable you to file the proper amount, avoiding any penalties if it is discovered that you had been under-reporting the value of your personal property.
5. Secure a Loan or Line of Credit
Many banks are now requiring a list of assets to be attached to a loan as collateral. When applying for a line of credit because you’re having cash flow difficulties, this is not the time to delay. Having an inventory list already prepared will enable you to complete the loan or line of credit application quickly, and supply the required information to the bank.
6. Buy or Sell a Business
A small business owner wanted to sell her business and received a fair offer. Part of the requirement, though, was that she provide a detailed list of the personal property. When you’re required to compile this information, while also dealing with the contract, terms of the sale, intellectual property and other issues that might be happening in your life, the task can be time-consuming and daunting.
Being prepared for change – whether it’s a disaster, offer to purchase or the need for a loan – makes sense. Know you’re ready, no matter what comes your way.
Cindy Hartman has found that a wide range of corporate experience served her well in late 2004 as she and her husband, Mike, pursued their entrepreneurial dream. As President of Hartman Inventory LLC,, a personal property inventory service, Cindy brought her corporate marketing, customer service, training and finance experience into the business. This experience came from industries that included retail, manufacturing, education and distribution.
Additionally, she is Vice President of Hartman Inventory Systems LLC, which is a turnkey package that assists others who have a desire for business ownership. Interest in this new, growing industry is a result of having been burglarized twice. Experiencing the difficulty of the insurance claims process and resulting potential loss after a burglary, fire or natural disaster, she has made it her mission to share the importance of knowing what you own with business owners, renters and home owners. She shares this knowledge through her company newsletter and blogs.