Digital Landscape vs Physical Asset Landscape
When understanding an acquisition, you want to understand the ever changing environment and the innovative principles that are taking stronghold over the space.
There are two types of assets.
Intangible assets and Tangible assets.
Speaking further, there are digital assets and physical assets.
Anything relating to people, products, inventory, real estate, equipment, etc. can be chalked up as physical assets.
Everything else should be more or less theoretically viewed as digital. A proposal process, a telephone number, a website that captures leads or all the digital assets of the business.
More specifically, there are two layers to view any moving part of a business. It’s either physical in nature or it is digital and in the ether.
Costs and expenses are generally higher with physical than digital. Digital assets are more easily replicable but also more reliable in the sense of if they are working well upon acquisition, they might be easier to maintain.
Both do require maintenance.
Software needs updated architecture. Physical property needs plumbing issues addressed, landscaping, painting, exterior fixes, interior maintenance, furniture, etc. Physical property comes with it rent, insurance (which is rising rapidly in costs), and taxes.
Both have benefits and advantages.
However, physical brick and mortar presence is generally taken more seriously from the public than a digital only presence. The best businesses are the ones that have both just enough physical presence and a great digital presence to capture leads and generate online sales.
With an increase in online shopping, and rising real estate costs and maintenance costs, it is becoming apparent to move more digital. However, a great business will try to have both. Brick and mortar sales in combination with online sales is wonderful if you have it, but digital presence is necessary for grabbing attention and specifically marketing. Smartphones dominate peoples use of time in today’s era. Whether you are a dry cleaner or a cell phone company, you need good search engine presence and a proper website that attracts leads if you want to maximize opportunity.
In the same token, an online only business is a dream but even the best online businesses have moved to creating innovation in the physical space also if possible.
To really understand the value of a business, you want to break down the proper metrics associated with what the online presence is bringing in and what the digital presence is bringing in. You also want to assess the costs associated to run each. You don’t necessarily have to understand the individual pieces to understand if a business is solid, but it will give you good ground if you want to make any changes or streamline expenses.
We look forward to helping you understand if a business is a proper acquisition or not.
If you would like to hop on a call with us to go over things related to acquisitions and general business overview, please schedule a time here. We do a one hour deep dive where we go over your needs as it relates to acquisitions & business expansion, and then we go on the hunt for you to line up a business that fits.
Contact us for your next acquisition purchase:
Email – firstname.lastname@example.org
Phone – (800) 773-1523
Leader in Acquisitions with Expertise in Representing Sellers & Buyers on Deals
Jarbly is a leader in acquisitions with expertise in helping with listings, negotiations, LOI's, asset purchases, company purchases, and real estate purchases. JARBLY has access to high net worth individuals if you are on the sell-side and businesses that may be of interest to you if you are on the buy-side.