One of the biggest challenges that most people face when trying to invest and improve their wealth portfolio is managing their assets. Good asset management can help you move from barely making it in business and personal financial growth to real success. Unfortunately, most people just imagine that they will figure it out somewhere along the way.
Most business people usually shy away from getting an asset manager because it costs money. But if you weigh the costs against the benefits, you will find it a worthy investment. Here are three steps that you need to follow for asset management.
Get an Asset Manager
Your first step in better asset management should be finding an experienced manager. Some of the business assets they help you manage include cash, office equipment, furniture, business cars, buildings, warehouses, land and other investments. As your business expands and you get busier with the management and development tasks, you will find it harder to keep track of all your business assets, especially when you have branches in different cities.
However, when you have an asset management expert overseeing everything, you will have fewer asset management problems. Hiring an asset manager is a great way to make sure you pay property and asset taxes on time and prevent your assets from deteriorating and losing their value.
Figure Out the Life Cycle of Your Assets
After you have chosen someone to take care of your assets, let them know that their first responsibility is figuring out the assets' life cycle. For instance, if you have had business vehicles for six years, you can probably expect them to serve you for another four years before you need to replace them. Similarly, if the vehicle is less than three years old, you should expect another seven years of service. The more your equipment and assets age, the more frequently you will need to maintain and repair them to extend their life.
Track Your Asset Depreciation Rate
The third step is to keep track of how the assets are depreciating in value. For instance, by the time you use a printer or photocopier for two years, its value will be less than it was when buying it. The same happens with the other assets such as cars, furniture, machinery and heavy equipment.
The asset manager should constantly update you with the approximate value of your assets so you do not end up overestimating the value of what you own. Depreciation also helps you figure out when to dispose of and replace an asset.
You will have an easier time managing your business assets when you hire a professional to help you do it. This will maximise productivity and reduce unnecessary purchases.