By Sancho Simmonds, Assurance and Business Services Director, Smith & Williamson
The recent riots were a reminder of the need for businesses to control and protect their assets. But making certain that your tangible and intangible assets are properly protected, controlled and exploited efficiently is something that businesses should be doing all the time.
Control and protect your assets
Reviewing your insurance cover to ensure it still meets your needs is just one important area of protection. More fundamentally, all the assets needed to run your business efficiently should be under your ownership or control. If they aren’t, you should contractually protect your access.
Next, your systems should allow for accurate and robust recording of the assets and their related costs, including dates of acquisition, improvements or enhancements, depreciation, repairs and maintenance. Your systems should also enable you to forecast your future capital expenditure needs.
Exploit your assets efficiently
In the case of revenue-generating assets, don’t invest unless it’s on the back of a robust financial model showing a return on assets significantly above your capital cost.
Measure your asset utilisation ratios regularly - if these are important – and set milestones to measure the returns from new asset investments. Where possible, try to maximise the residual value of your assets once their initial utilisation period is over.
There can be advantages to leasing rather than buying new assets. Be aware of these, as well as the potential for selling and leasing back existing assets.
Manage your intangible assets
For many companies intangible assets, such as patents and trademarks, are the lifeblood and heart of the business. Controlling and protecting these important assets is therefore fundamental to business success.
Develop a strategy to ensure that you capture all your IP. Make sure that everything you need is under your ownership or adequately protected by appropriate registrations or license agreements.
Regularly check that third parties are not using your IP in an unauthorised way. Similarly, review license agreements periodically to ensure that their provisions are enforced.
Don’t forget other non-intellectual property intangibles, such as the value of contracts and customer relationships and how these can be protected through your day-to-day activities and operations. And finally, don’t forget your people. Good talent management processes are also assets that you simply can’t afford to ignore.
For more information on controlling and protecting your assets, contact Sancho Simmonds on 020 7131 459 or email firstname.lastname@example.org.
Watch the video below featuring Guy Rigby of Smith & Williamson discussing how good management practice increases business success.
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