Many businesses have physical assets to them, even if you’re running an online only business that only opens its physical doors to employees. If you work from an office space, for example, that’s a physical asset you’ll need to fork out for.
Seeing as commercial space has an average cost of nearly $40 per square foot, you can already probably see just how much of a drain this one asset could become on your finances!
But say you want to bring in more physical assets, with the goal to make conducting business easier and more convenient for everyone – how much is that going to cost you each year? Even if you don’t have the numbers to crunch just yet, it’s likely that it’ll be an unfathomable cost for a small business like yours, even if you’ve had some healthy growth so far.
However, the cost of expanding and investing your budget wisely shouldn’t put you off. Instead, you should focus on ways to manage these assets, as well as ways to make sure they grow in value exponentially. As such, here are the most common physical assets a business can hold and how you can look after them.
Office Tech
Anything you’re going to be using in the office counts as a physical asset. Your computers, your monitors, mice and keyboards, microphones and webcams, desks and chairs, printers and the copy machine – they all count. And if they’re on a connected iOT, one of them breaking down could lead to downtime elsewhere too.
Prevent this with a bit of planned downtime, software updates and patches, and plenty of training for the staff using them. It might also be worth instituting a rule that means no food can be eaten in front of the desks, and any drinks must have a lid attached. Crumbs and spillages are the most common cause of tech disruption in the modern workspace!
You should also be aware of how easy your tech can be accessed, both digitally and physically. Security features like CCTV cameras, while being another tangible asset, are a good investment for addressing this concern.
Commercial Workspace
We mentioned the average cost per square foot above but there are a few more things about budgeting for commercial workspace you should know about. Firstly, the rental cost may fluctuate, even if you’re locked into a tenancy contract. Secondly, even when you pay the bills consistently month after month, you could still lose the space at a moment’s notice.
It’s this latter point we want to focus on here. Commercial tenant agreements tend to be more stable than those in the residential sector, but you should always keep an eye out for signs that your landlord is going to renege. If it becomes hard to get in touch with them, for example, or they’ve been trying to raise the rent price for a while now.
If this occurs, it’s worth it to get a lawyer involved, as they’ll be able to signpost your rights in this situation. It’s an extra cost in the short term, but it could save you from losing all the cash locked up in the contract you signed six months ago. Indeed, commercial space can be very tricky to negotiate over without one.
Fleet Vehicles
One of the most common physical assets of modern business, running your own fleet can get very expensive without the right investment in management, maintenance, and upkeep. You can lose a lot of money to unplanned downtime, untracked mileage, and lost orders. The latter won’t do anything for your reputation either!
To ensure you can complete these tasks in an efficient manner, make sure you’ve got a handy software system deployed across your network. If you can, install it at an easy access point in your vehicle/work yard, where you can make sure every vehicle is signed out before use.
Of course, the software you use should reflect the kind of fleet you run. Keep your usage specific to ensure you don’t waste money on the solution itself!
If you own and run a fleet of dumpster trucks, reliable roll off software will be essential to keeping track of where your trucks are, what jobs they’re completing, and what time they’re likely to be back in the yard. Or if you have your own courier company and can muster five to ten delivery vans at a time, you need to know the number of orders assigned to each van, as well as the contents and value of the orders inside.
When you have these details all in one place, it’s far easier to fulfill customer expectations and deliver a satisfying service. One of the biggest benefits of this? A long term higher rate of repeat custom, which will make paying for your fleet a lot more affordable, especially if you want to expand in the near future.
Inventory Contents
What does your business sell? This is what makes up your inventory. Anything you could sell for a profit, anything that gets restocked from time to time, makes up the inventory under your title. As such, your inventory tends to be one of the most valuable tangible assets you have.
It’s likely that you already do whatever you can to keep this contents safe, but there may be a couple more things you need to consider. Shrinkage, for example, is the number one concern for a business’ inventory but many reasons could be behind it. It’s not just employees or third parties taking from the store room – you could lose things after they’ve been shipped or items could simply be misplaced from time to time.
There’s also another potential issue here, if you have just the one product and you’re not in a position to come up with more. The longer you let your inventory sit without any innovation, the less valuable your product line is going to become over time. Try to diversify as the years go on; investing in a research and development department could be the next best step for your company’s profit margins.
Your Team
While not technically an asset, your team should be treated as carefully as one, and you should place as much value on their skills and capabilities. The more you put stock into your team, including providing training, promotion, and pay rises, the better their output is going to be. This way you can be sure any work they complete will be to the highest standard possible.
Your employees should also be well aware of what you think about them in words. If they’ve done a good job, tell them so. If it’s needed, provide constructive criticism that can be worked on, and try to remove all hints of frustration from your interactions before it becomes a problem.
Apply these principles to your team and your employee turnover will remain low. A low turnover means you won’t waste money on the payroll, and you’ll retain the skill you really need no matter what offers come from elsewhere.
If your business has a few tangible assets under its belt, you’re probably a little worried what the future will look like. After all, money tends to be in short supply in the small business world! That’s why you should invest only in what you need and the best ways to take care of them. And remember, as long as these assets don’t decline in value, your business will still have a solid ground to build on.