Now that we’ve recognised the assets we’ve already been creating, it’s worth looking at ways of strengthening our position.
If we think of it like offence and defence, offence is the deliberate efforts to increase or enhance our assets, while defence is the preservation of our current assets against decay or competitors.
You probably want to work on both of these approaches.
Here are some concepts to spur your creative thinking…

Making Money While You Sleep
Sir Michael Caine gave some business advice to his good friend Vidal Sassoon, a popular London hairdresser:

“In spite of the fact that he was the most famous hairdresser in the world, this did not stop me from offering some advice to him (Vidal Sassoon) in lieu of rent he would not accept.
I gave him a lecture on the way he was doing business, and the gist of it was something I really believe you must do if you want to be mega-rich.
It’s simple.
You must have something that is working for you while you’re asleep.
For instance, successful musicians have got it made.
Their records or music are being played all the time, every day, somewhere in the world.
No matter what they are doing, they are still making money.
You are a great hairdresser, but you can only charge so much for a hair-do and you can only stand on your feet for so long so there is a ceiling on the amount of money you can make.
So, you’ve got to make shampoos and other products that work for you while you are asleep.
He agreed with me and told me that was what he was going to do.
I think I paid for my stay.”

What incredible advice.
How might your business make you money while you sleep?
What can you put in place over the next two years to make this a reality?

Bottlenecks
If you’re looking for where to add an asset, perhaps start with the bottlenecks in your business.
These are the narrow points that limit the growth of your company, such as:

• The number of customers who know you exist

• The number of leads and enquiries

• Your sales or customer service team

• The team who create your products and services

• Your physical premises or storage space

• Your partners and suppliers who perform a specialised task

• Your founders and their magic touch

• Your approval systems for signing off work

Asset creation requires a financial commitment, but if they address a bottleneck you’ll soon recoup that cost with increased sales.
You’ll also appreciate the reduced stress and frustration from removing these sources of tension.

Valuing Good People
People aren’t assets, since they’re not “owned” by the business.
That said, a business needs a way of consistently hiring, training and retaining great team members.
You’ll need a way of finding and identifying the type of person who will fit in with your culture, especially if you want to employ people in other parts of the world.
You’ll need a way of training them quickly and effectively, so that they can produce high quality work without a long lead time.
Motivation is temporary, so you’ll want a system that helps bring out people’s best, and identifies issues before they take root.
You’ll also want a way of retaining top performers as well as exiting people who aren’t right for your company. Well designed policies can save you the cost and hassle of litigation and mediation.
Remember that replicability comes from you being able to “sell” the people on your team, or else customers will insist that the founder be personally involved in every project.

Assets Need Maintenance
Almost every asset needs maintenance.
This is where you spend a bit of time and money keeping the asset in good condition, knowing that this cost will be outweighed by the increase in the asset’s value.
You maintain your social media presence by creating good quality posts, you maintain your academic credibility by writing peer reviewed content, and you maintain your machinery by servicing it throughout the year.

William Wrigley Jr, of chewing gum fame, was once asked about his advertising spend while travelling on a train.
‘Mr Wrigley, your gum is known all over the world.
Why do you bother to continue advertising?’.
Wrigley asked his colleague ’How fast do you think this train is going?’
‘About 60 miles an hour?’
Wrigley replied ‘Well, since it’s on a good run, do you suggest they disconnect the engine?’

Failure to maintain an asset usually ends badly, but it can take a while for the decay to become evident. Owners tend to milk their cash cow with no consideration for its health, until one day production ‘inexplicably’ dries up.
If you don’t care enough to maintain your assets, it might be time to outsource them to a specialist, or sell them to somebody else.

A business owner can use incremental improvements, or periodically do a total overhaul.
History is full of examples of the pros and cons of each strategy.

Incremental improvements can keep an app or platform feeling modern, but also removes the opportunity for total reinvention, like how Blockbuster twice declined to buy Netflix in its infancy.

Total overhaul can reinvigorate a company, but at the risk of alienating their core fans with their new-look offering, or trying to bring back customers who switched to a competitor years ago.

Over time a business can replace almost every one of its assets and still be known as the same company.
This is sometimes known as ‘Trigger’s Broom’, named after a road sweeper from the show Only Fools and Horses who maintained the same broom for over 20 years – except it had 17 new heads and 14 new handles.

Copying And Defending
Lots of assets can be copied if you study them closely enough, but in most cases people can’t be bothered spending the time and money.
It’s possible to reverse engineer what makes successful businesses work, be it their systems, culture, strategy or advertising.
It’s also possible to only copy the surface elements while neglecting the most important aspects – often the case for imitators who don’t understand why certain assets are valuable.

Copyright doesn’t mean that nobody else can start a similar business to yours, but rather it means they can’t copy the exact details you’ve used.
The law is not designed to prevent competition, it’s there to prevent misrepresentation.
In other words, you can enforce copyright to prevent someone deceiving customers by pretending to be your brand, but you can’t stop them from making a better offer than yours.

How much would it cost you or someone else to recreate or rebuild your assets?
This is what Warren Buffett calls a “moat”, the barrier that repels attackers from taking over your castle.
For some, their moat comes from ‘First Mover Advantage’, a benefit for the company that first enters a new market or who brings a revolutionary product.
Once established, they are very hard to catch.
For others, they succeed by going second and getting it right.
Apple rarely goes first, but gains market share by taking new technologies and making them easier to use.

Monopolies
Where might your business be able to create a monopoly?
Monopolies occur when a certain asset is scarce and in demand, with very few acceptable substitutes available.
e.g. a painting by Vincent Van Gogh is scarce and valuable today, but wasn’t when he was alive.
Or the little cart on aeroplanes can sell alcohol for whatever price they like, since they are the only wine vendor in the sky and you’re unlikely to uncork your own bottle from home mid-flight.

You can have a monopoly when you control the supply of a valuable asset.
Apple have their customers over a barrel with iOS, forced to buy special dongles and connectors that fit their lightning ports, and they don’t let third parties make their own compatible accessories.
This works because we don’t want to learn how to use a new operating system.

Monopolies come to an abrupt end when a customer discovers a viable alternative.
Sometimes these are direct substitutes; Uber offered us an alternative to taxis, and Airbnb offered an alternative to hotels.
Other times they are indirect substitutes, like choosing to go ice skating instead of seeing a movie at the only cinema in town.

Sometimes entrepreneurs need the guts to recognise their monopoly and charge accordingly, especially when they themselves are the scarce asset.
If you possess a rare set of skills or intellectual property, don’t let customers push you for discounts or unfair terms – know the worth of your asset!

Next, we’ll look at the entrepreneur’s options and considerations for what to build in the next six months…