Research has revealed that UK businesses could be collectively wasting £280bn every year through a lack of asset management.
Troostwijk, an auctioneer specialising in industrial assets, commissioned the research which uncovered a third of businesses without a person responsible for asset management. Even in small businesses equipment can be left to languish in a forgotten cupboard if an asset management strategy is not in place.
Why asset management matters
Assets cost money to buy, run, store, and maintain. If they are not utilised, they represent money which can be pumped back into your business where it’s needed. Poor asset management in any size organisation allows equipment to go to waste, and even risks new procurement when existing kit is available.
Paying for maintenance of surplus assets is an unnecessary cost, though not maintaining them usually means that they depreciate in value more quickly. It can also result in you getting stuck with kit that you need to pay to dispose of, rather than finding a buyer for.
Streamline procurement with asset management
Effective asset management keeps your business streamlined, and is a good way of weeding out unnecessary spending. Introduce an asset register and a process for keeping it updated. If this is consulted as part of the procurement process, even in tiny companies, it might identify unnecessary spending, or even patterns of it. You might be hitting the repeat order button for office stationery, when you already have a cupboard heaving with pens and pencils.
Ensure efficient processes
Equipment or plant machinery might have been purchased to complete a process in a particular way, or for a certain reason. If the asset isn’t in use, it might mean that the process also needs to be reviewed. Are things being done in the best possible way, to yield the best outcome for your business? Removing equipment from the system might make things work better all round.
Types of asset
Tangible assets
Anything physical which is owned by the business is classed as a tangible asset. This might include property, vehicles, or equipment. If a tangible asset lies dormant, investigate the worth of repurposing it, or selling it on. Letting out office space in a building you own can help it make you money if you don’t want to sell. Renting equipment rather than buying it in also makes sense if you only need it very occasionally.
Intangible assets
This is a bit more difficult to quantify. Your brand, identity, or reputation are all intangible assets. The knowledge that your business has, and its reputation for excellence can all be of value to you.
Intellectual assets
These sort of fall into the middle ground. Your logo, actual branding, trademarks, patents… they’re all your intellectual assets, and can be worth a lot of money, especially if you have something trademarked that a lot of people want to copy. Keeping track of ensures you don’t let patents expire, or miss out on sales opportunities for a market that wasn’t ready for you at first, but now is.
Managing your assets in all of their forms will help protect your business, and keep it efficient for the future.
