When an asset is used up as part of business operations, the owner is left with only what remains of the asset. The amount of the asset used up is not a good measure of the efficiency of the business.
The main reason that companies want to “conserve” their assets is that they can then sell the assets they have at a much better price to someone else. The problem is that once you have the asset, you’re stuck with it.
If you think about it, the problem is that when an asset is used up, it is simply wasted. You don’t gain anything new from the asset, you simply lose it to a competitor. In fact, when you have a large, expensive asset, if it is ever sold, you can make twice as much money for the company by selling it to someone else. What we’re really talking about is a situation where the company never gains anything from the asset.
Think about how much a company might need a particular asset before it is “worth” it. It might need a certain number of employees, a certain number of employees to make a good price, or a certain amount of capital to turn a profit. Then you can think about the cost of buying, selling, and moving assets, and how much money you might be able to make if you were able to trade it in for something else.
For a while the first time I visited the tech shop on the island, as it was being used as a testing site, I was having an epiphany. The tech shop was a test-drive of what could be done with an internet browser to determine what would work best for the computer user. And there was an excellent list.
One of the things that could be done with an internet connection is that of course, is that of course, the tech shop to be used as a testing site for new software was one of the things. But, the truth is that the tech shop, though it is currently being used for testing, would be of little use if it were to be taken over and turned into a real company. And it’s not like it would be profitable to do so. Not in the least.
The software shop isn’t profitable because it doesn’t generate any revenue, but it is used for testing a software that generates revenue. And though that software is of little value to anyone, it did generate revenue for many companies.
The truth is that the only way the tech shop could be used for testing, is if the company were to be acquired by a different company, and then put the test software in place of the existing one. The only way it could be used for anything else is if the company were to be sold to a different company, and then put the testing software in place of the existing one.
This is, of course, exactly the same situation in which all companies are in right now. And that’s why the company needs to be sold.
