It takes a lot of time, effort, and funding to get a business up and running. Once your business gets established, you cannot simply sit back and relax. Remember that both the tangible and intangible assets of your business are exposed to certain risks. Without proper asset management, these risks could result in significant loss of your business assets. As a business owner, you should be aware of all possible risks and use the right strategies to minimize or eliminate the risks.
The Advantages of Developing an Asset Management Strategy
The first thing to do is to develop a strategic plan for managing your company’s assets. Having a strategy in place would enable you to get the following benefits.
- You can keep records of repair, replacement, and maintenance of your company’s assets and analyse those frequently. This helps you lower costs required for the maintenance and replacement of your assets.
- You can minimise equipment breakdown and production system failures, thus reducing downtime and unplanned outages.
- You can avoid losses and reworks due to equipment failure, which results in cost reduction
Asset Management Strategies and Benefits
Getting your assets insured is perhaps the best way to protect them against all possible risks. If you want to use this asset management strategy, you have mainly two options. You can opt for either a comprehensive or a stand-alone commercial insurance plan. The former covers various risks, such as, fire, burglary, personal accident, and third-party liability, under a single plan, while the latter allows you to get customised solutions based on your insurance needs. Let’s take a look at some common types of coverage and their benefits.
- A fire insurance plan enables you to protect your business’s tangible assets against the losses and damages that might be caused by fire and other natural disasters.
- A burglary insurance policy offers protection against loss or damage to your assets that might be caused by break-ins, theft, and burglary
- A money insurance policy provides protection against the loss of money. The money can be in different forms, such as, hard cash, cheque, bank draft, and pay orders.
- A business interruption insurance plan provides covers against losses to business profits due to business interruption as a result of fire, flood or other natural disasters.
Another effective asset management strategy could be asset finance. This enables you to purchase necessary equipment to grow your business with minimal upfront capital, improve cash flow, maximize financial leverage, and get tax benefits.