Transforming Your Gear From Liability To Asset
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Most businesses rely not only on the people inside it and the skills they bring with them but the gear they use to get the job done. From an electrician’s toolbox to heavy construction equipment, from the low-tech to sprawling IT systems, they are a valuable part of the business. As with everything valuable in business, they have a chance to become a risk if their investment is protected. Here, we’re going to look at how you make sure your assets are actually assets and not a potential liability to the business.
Protect it
The gear you use in business is an investment, first and foremost. You’re expecting it to pay off as an instrument to further profit. However, if you don’t pay attention to the real risks that it can encounter, then you can lose the instrument, lose the investment, and lose the profit. For truly valuable equipment, such as IT and heavy construction equipment, crime is one of the greatest dangers to your assets. Protecting high-value gear with accessories such as GPS trackers from suppliers such as Tenna and tighter security methods through surveillance and access restriction is a vital protection. For the risks of sudden damage due to natural disaster or vandalism, it’s crucial to insure your assets as well. It may mean their respective costs rise in the short-term, but it’s often the only way to recoup a loss.
Maintain it
Of course, there are plenty of risks that the owner is entirely responsible for and many of these are completely preventable. All assets suffer wear and tear over time, and knowing when you’ve got the maximum benefit from a piece of equipment is important. But extending that maximum benefit is even more financially rewarding. Make routine maintenance a cornerstone of your business. In manufacturing environments, for instance, many of the machine operators are trained to perform on-the-job maintenance during a machine’s downtime, as well as having all equipment on a schedule for more thorough checks and fixes. Beyond postponing the risk of a complete breakage, maintenance will keep your equipment in better condition for longer. Otherwise, their decline isn’t always immediate, but can rather result in long periods of sub-par performance levels before their issues become noticeable.
Use it right
One great risk of breakage or the high costs associated with accident and injury is the incorrect use of your workplace equipment. This is especially true of industries like construction, manufacturing, and mechanic garages. There’s a difference between certified and qualified. Someone might be certified to use a piece of equipment correctly and safely. However, without frequent safety training, guidelines for correct equipment usage, and a workplace that’s quick to pick up on usage errors, they’re not truly qualified. Their knowledge and skills should be sharpened repeatedly. If they’re not, the best-case scenario is that they’re ineffective and inefficient. In the worst case, they could hurt themselves of their coworkers.
Get it only when you need it
You know the processes you have to carry out in the business and you might buy equipment according to those needs. However, if you haven’t properly considered the demand for those processes and their associated equipment in the first place, you might be spending money where you don’t need to. Businesses often bite off more than they can chew, spending before it makes sense. Outsourcing or leasing equipment might be more sensible than buying the equipment outright. As you scale, you may want to become more self-dependent and bring that equipment in-house. Make sure you get to the point where your demand fits the necessary levels to justify a purchase before you do that, however.
Find the right suppliers for it
In all likelihood, you will find competing suppliers for each piece of equipment. For IT equipment, you will often find more than you reasonably get to know. Choosing the right supplier for the business can be tricky. It’s sometimes worth paying more upfront in order to enjoy the perks of a better working relationship. For instance, consider the warranties that they offer alongside their equipment, as well as the state of their own business. Do you know who their supplier is? If they’re a wholesale provider, then you can be better assured of their reliable supply if, for instance, they are certified by the company whose products they’re selling.
Use it for funding
Your equipment can be an asset in more ways than just helping you get your work done. They are also a straightforward financial asset. However, that doesn’t mean you have to sell them in order to unlock the financial value they contain. Instead, they can be used as a source of credit when the business needs funding. If traditional options fail or aren’t offering terms you’re willing to agree to, contact Equify to find out more about options like asset-based lending. Managing your credit and applying for direct loans can often be more work than it’s worth, but using the inherent financial value of your assets simplifies the process a lot. When they’re used as collateral, there is, of course, some risk that you can lose them if you fail to pay your debts. That’s why you should ensure in advance that you’re only agreeing to debts that you currently have the means to start paying off.
Don’t let it go unused
Perhaps you overestimated your demand for a piece of equipment. Perhaps your needs have changed. Perhaps you simply haven’t taken as much care of it as you should. If there’s any reason that a piece of equipment is going unused, the longer you let it rot, the less value it will be to you. As it degrades, it loses its financial value. So, be realistic about the prospect of using the different equipment in the business and be willing to sell business assets as soon as you believe they are becoming a drain on your resources.
The saying goes that a shoddy workman blames his tools, but anyone who doesn’t look after those tools is just as self-defeating. Take care of your gear and your gear will take care of you.
