Controlling assets
The Challenge
To ensure that both tangible and intangible assets are properly protected and controlled, and exploited efficiently.
The Solutions
Control and protect your assets
- Ensure all the assets you need to run the business efficiently are either under your ownership or your access to them is appropriately contractually protected
- Make sure your systems enable accurate and robust recording of related costs (including depreciation, repairs and maintenance, etc)
- Review your insurance cover regularly
- Ensure you regularly forecast your future capex needs
Exploit your assets efficiently
- In the case of direct revenue – generating assets, don’t invest unless on the back of a sensitised financial model which shows a return on assets significantly above your cost of capital
- Be aware of the advantages of leasing (as opposed to purchasing) new assets, and the potential for selling and leasing back existing assets
- Measure your asset utilisation ratios regularly, if these are important
- Set milestones to measure the progress of new asset investments – to establish evidence of failure, as well as success
- Ensure you maximise the residual value of your assets once their primary utilisation period is over
Manage your intangible assets
- Ensure that all the intellectual property or technology you need is under your ownership, or adequately protected by appropriate license agreements
- Ensure that all your intellectual property is appropriately registered ( e.g. copyright etc)
- Review regularly that all your IP is not being used by third parties in an unauthorised way, and that all license agreements are periodically reviewed and their provisions enforced
- Make sure your talent management processes are up to scratch. (see “People”)
- Don’t forget other non – IP intangibles, e.g. the value of contracts / customer relationships; consider measuring their financial value regularly, to enable you better to assess the consequences of loss
This document is part of the Entrepreneurs' Toolkit series, produced by Smith & Williamson. More information on this and other toolkit topics is available at www.smith.williamson.co.uk/entrepreneurs
