A balance sheet that is both a “Thriller” and “Bad”

Michael Jackson’s recent passing made huge, mind-bogglingly popular headlines, and showed us the power of the web-based media to get the information out quickly. Not surprisingly, in the days that followed, the media closely scrutinized his life, death, and family. In his life, Jackson was a music legend and an icon; and tragically, became tabloid fodder in the past few years.

At IAC-EZ, we’re (of course) not interested in his family life or personal problems or the rumors surrounding the many unusual aspects of his life. But this article, published in the Associated Press, gives a fascinating (and reasonably balanced) glimpse into his financial affairs. No, don’t worry, we’re not speculating on who gets what. What interests us more is his balance sheet described in this article and depicted here.

The balance sheet shows a level of financial success (some would say excess. and we might agree that his spending habits weren’t helping his financial situation). Of particular interest, though, is his share in the Sony/ATV music library which contains numerous songs, including songs by the Beatles. (In fact, Paul McCartney has to pay to play any Beatles song when he’s performing! You can read about that here.  This is a huge deal for Jackson (apparently inspired by his friend McCartney, ironically) and makes up the largest amount in his balance sheet.

Now, as you read the article, you might observe (with disdain) that he “only” had nearly $700,000 in cash. Who among us wouldn’t want that much in cash? But consider this: It’s not necessarily cash that he’s saving for an extravagant buying spree, (well, it could be, perhaps, but…) it would probably also be needed to pay for staff and upkeep which is expensive. In other words, I’m guessing that it seems low because it’s less-than-necessary operating capital. (I know, I know, he should sell Neverland. We kept telling him that but I guess he never got our letters).

In your business, you may not always have the option to do so, but ongoing payments can provide you with all-important cash flow. Cash flow is good because during those quiet months when your products aren’t selling or your freelance services aren’t in high demand, ongoing cash flow can get you through.

In fact, it’s a lot like a preferred stock or a rental property: You own an asset that appreciates over time (hopefully!) but you earn cash flow on it as well.

It might not always be possible for every business but here are a few ideas to consider to generate cash flow:

• Affiliate programs: You sell other people’s products or services in an affiliate scenario, OR, you have other people sell your products or services for you.
• Royalties: By creating content that is published with payment required whenever it is used. One friend who works in the music industry makes a FORTUNE by writing music for commercials and TV shows.
• Membership/Licensing fees: Create a product or service that requires a small, regular amount in order to use the service or get access to the product.
• Rental: This might be the rental of physical property or even of web-based property (like a URL or hosting).

R.I.P. Michael Jackson

-Jessica Routier, IAC-EZ

Jessica Routier

Jessica wants to talk to you! She is who coordinates the contests, travels to all the conferences, and interfaces on a fun level with customers on a daily basis in order to bring our users together as a community.

Jessica has a B.Admin and an MBA. Her background in business, along with a diverse skill-set (including a diploma in Medical Transportation, retail experience, and experience as a paralegal) make her a valued, highly flexible team member.

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