The assets of a business are defined as tangible, intangible, and intellectual property. A business’s plant and equipment, including its property, are classified as tangible assets.
The maintenance and protection of these tangible assets are essential when evaluating the success of a business. An organization should consider the health of its plant and equipment integral to the overall well-being of the business itself as the plant and equipment is essential to the success of meeting on-time delivery of the products and services that are being offered.
The following considerations will aid in determining if the tangible assets are holistically well:
Are they protected?
Fires, theft, and vandalism are not uncommon occurrences that happen in business. Similarly, lawsuits or incidents of negligence may be claimed against the company itself. Prudent business owners will want to protect their assets against actual or threatened loss. Hence, the need for Property and Casualty insurance. Property insurance will cover the property including offices, equipment, and tools. Casualty insurance includes Workers’ Compensation, General Liability, Errors & Omissions, Employers Liability (EPLI), and most importantly in today’s technology age, Cyber Liability.
Are they up to date?
It can be sometimes difficult and costly to keep up with technology. It is ever-changing, expensive to keep updated, and time-consuming to train employees which can cut into production adding additional labor costs. Yet, supplying employees with the right tools and a workspace that meets modern conveniences provides efficiencies maximizing performance that can ultimately offset these costs.
Are they safe?
Providing employees with a physical working environment and equipment that are operating safely is conducive to high performance. Not only are employers required to comply with the Occupational Safety and Health Act but being able to manage business costs related to workers ‘compensation, medical costs, absenteeism, turnover, etc. safety sets a culture within the organization that the employees’ wellbeing is important to the success of the business.
Are they running efficiently?
Ensuring that your business can maintain its plant and equipment will enhance an employer’s ability to manage downtime and sustain production. Employers should focus on proactive or routine maintenance to prevent (to the extent possible) problems from occurring. Additionally, immediate response to corrective maintenance needs is equally imperative to maintain on-time delivery of products and services to meet customer needs as well as ensure employee safety.
Whether a business is protecting its tangible business assets from damage or ensuring they are safe, updated, and maintained, safeguarding the plant and equipment and other tangible assets are critical to the long-term sustainability of a business.