Stranded Assets

Stranded Assets

Update: 2020-05-29
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On today’s show we’re talking about stranded assets. These are assets that can’t be used at all. In some cases they’re merely under-utilized assets. You can find deeply discounted assets in today’s market. But only if you train yourself to look for them.


Underpriced assets have a substantial sunk cost in them.


The old school way of doing this was to go to the weekend garage sales and buy items of high value for pennies and re-sell them on Ebay for a higher price. The problem with this approach is that it requires a lot of time, the dollar values are low, and therefore the profit potential is low even if the percentage gains are high.


Buying gym equipment or bicycles will net you a few tens of dollars every time you stop in someone’s driveway.


These opportunities exploit inefficiencies in the market for used items. But I want you to think bigger. Think restaurants, hotels, boats, trucks, cars, ships.


Sometimes, the assets are not physical. It could be a list of customers, or a handful of high quality relationships. You see the value of a business is based on the quality of its customers. If you want to do better business, then find better customers.


The headlines over the past several weeks have focused on the tens of millions of people who have lost their jobs. That’s a tragedy by itself.


There’s been almost no mention of the tens of millions of customers who have lost their favourite restaurant, their favourite clothing store, the ice cream stand next to the barber shop. Oh and the barber shop is gone too. Who is out there serving those millions of clients who have been separated from the businesses they have been loyal to all these years.


the hidden assets which are less tangible could likely be purchased for zero dollars and nothing more than a royalty. The good-will that has been built over the years between restaurants and diners, between florists and funeral directors, between health food stores and those with dietary restrictions has real value.


Let’s look at back at the people who have been laid off. There are millions of front line workers, some of the bottom income earners in any business that have been impacted the most.


At the other end of the spectrum there are very senior people, those with immense technical and business know-how. These are the high six figure earners that the businesses could not afford to retain. Most importantly, these folks have immense connections. They have incredible relationships. These folks are probably not getting hired into another company in a comparable role anytime soon. They have a lifestyle and cost structure to match their previous salary.  The relationships they have, could be the seed of a business transformation for those businesses that know how to leverage them. Many of these laid off workers are sales people who are used to working on commission. They’re used to getting paid for performance. They know that money doesn’t flow until something gets sold. Maybe a re-energized top notch sales team that costs you nothing to hire and only makes you money could help your business.


These are all assets that you can find at a garage sale. These are assets that are hard to connect with the right buyer. Because the right buyer is unlikely to stumble across them by randomly wandering around.

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Stranded Assets

Stranded Assets

Victor Menasce