How To Turn Your Spare Capacity Into Cash

More and more businesses and society as a whole are looking for ways to use the assets and resources available to them more efficiently.  This is probably the start of the Resource Revolution.  A typical asset that is underutilised is the car.  Most of the time the car is waiting on the drive or in the car park.  The car normally has four seats and when driven usually the occupancy is less than this.  There are many initiatives such as car-pooling around to try and utilise this resource more efficiently.

The resource or asset that is most often underused in a business is its spare capacity.  Every business except the odd one-man band has some spare capacity.  The spare capacity of a business is the amount of extra business it can do without increasing its fixed costs.  It is an asset that every business has right now.  For many businesses like hotels, restaurants and those in the service industry, the spare capacity is a perishable product because if it is not used it is lost.   If a spare room in a hotel is not rented out tonight it can never be rented out tonight ever again.  The opportunity to extract some value from the room tonight is lost forever.

Yews it or Lose it!

As an example, if a hotel had vacant rooms it could try and entice customers to fill this spare capacity by offering a reduced rate.  In fact, without being a member of a trade exchange like yewtrade this is almost the only option.  By renting out a room in exchange for yewtrade pounds (Yews) the hotel can attract customers it wouldn’t have had from members of the exchange for something tangible that can then be used to pay for other expenses the hotel may have.  The hotel could use the Yews generated to pay for its own business expenses such as printing brochures; paying for repairs from local tradesmen such as plumbers and electricians when needed; paying for courtesy taxis for airport transfers and many others.   Since these expenses can now be paid for by the extra business it wouldn’t have otherwise had from its spare capacity the cash normally reserved to pay for these expenses is conserved in the business consequently increasing the cash profits.