Starting a new business can be really tough, and scaling up, even more. As a business owner, you face major challenges when scaling up your startup, right from people and operations management to business growth ideas, marketing and more. None of these is straightforward and require lots of time and effort.
As the founder of a growth-phase startup, your main goal is to bring in more prospective clients and ensure rapid business growth. In order for this to be achieved, you need all your business functions to run at maximum efficiency.
While the focus is on business growth, you would be investing heavily in people and in turn fixed assets like office space, furniture, IT equipment and more, to enable your employees contribute to the growth.
Listed below are the top 5 reasons why efficient asset tracking and management is a must to make the most of your investments into fixed assets.
1. Growth at break-neck speed
Once funded, most start-ups are required to grow at break-neck speed. While this is much needed to scale-up and capture a large market share really fast, it also brings in a lot of operational challenges. It is quite easy for a start-up to lose track of the investment being made into their fixed assets and more so, actually tracking and managing fixed assets for high efficiency and turnover.
2. Limited resources for asset management
Again, the core focus of a funded startup is business expansion and most of the available resources are used up for this. With little resources left to manage and track the assets efficiently, this may lead to gross under-utilization, pilferage and unwanted purchase of assets.
3. More employees, more fixed assets
With the need to grow fast, the business usually hires many employees across a lot of functions like technology, marketing, sales, operations etc. And with many employees comes the need to invest heavily in fixed assets to enable all the employees to be most productive.
4. Scattered and moving assets
Rapid growth may also require expansion across many geographies at the same time, leading to scattered assets or assets being transferred across many locations. While the IT and administration departments focus on arranging the required infrastructure, the on-going management and maintenance of such infrastructure may be overlooked.
5. Limited systems to track, manage and maintain fixed assets
While a business starts to grow rapidly the first systems to put in place are most likely a book keeping software, CRM, HRMS, Marketing automation tools or even an ERP. Most of the times a system to track, manage and maintain assets is overlooked. It is only when assets grow out of proportion and things go out of control, a business / functional team looks at streamlining their fixed assets management.
All of the above factors lead to 8-12% reduced fixed asset efficiency and turnover. It may even lead to non-compliance on the statutory front or incorrect reporting to investors and parent entity.
Implementing a fixed asset management early on will ensure accurate asset accounting, compliances, reporting, efficient management, in-time maintenance and more. Below are the major benefits:
a. Robust audit trail and complete security
Having a specialized asset management system will help you to perform audits in order to increase the visibility of your assets and reduce any compliance risks. This gives you better insights and accurate data to support your business growth ideas. With regards to security, asset management systems also provide you with permission-based access control, having your confidential information only accessible by authorized persons.
b. Increased productivity and time saving
A good asset management system releases your employees from some administrative and manual tasks such as updating spreadsheets, tracking of assets and scheduling maintenance. This allows them more time to focus on other core operational areas of your business and be productive so that the goal of business expansion will be realized.
c. Reduced maintenance costs
A good asset management system helps you track and gives visibility on when your assets were last maintained and notify you when you need to schedule new maintenance. Asset management systems also notify you when asset warranties are about to expire, so you can be proactive instead of reactive in the handling of your assets.
d. Software Licensing
Using a dedicated asset management system can save significant sums through reducing the over-purchase of software licenses and help organizations avoid the legal risks associated with under-purchasing. You can be 100% confident in the integrity of your data. A specialist system comes with strict security features in place to address issues of input errors and inaccuracies and automates the entire asset management process.
While the above listed are the direct benefits of investing in a fixed asset management solution for almost all businesses, the advantages are multi-fold if your business happens to be capital intensive.