Businesses cannot survive without critical resources that make what they do possible. These resources are crucial for business processes, activity and growth. Businesses should understand what these resources are, as doing so puts them in a better position to leverage them for growth and success.
The Significance of Resource Management
Any business owner should think of resources as things they need to keep track of, done through proper resource management. They are things that solve a problem, and that can cause unnecessary road bumps or added expenses if they are not managed properly. Knowing what these resources are will help business owners better manage and keep track of them, watching trends to see if they are helping or hurting the business. You can use them if they are helping and find ways to make better use of them or eliminate them if they are hurting the business.
Critical Business Resources
The most important critical resource for a business is inventory. If you do not have inventory, you cannot make revenue, and thus, you will not be in business. When we think of inventory, we typically think of physical objects that a business can sell to a customer.
It is important for businesses to also think of their services as inventory, even though they are not physical objects. Service inventory is the number of services a business can provide in a given timeframe. If a web developer can create one website per month, they have a service inventory of one website per month. A business can increase or decrease its service inventory as it sees fit or as the number of customers fluctuates.
Apart from inventory, businesses must also keep track of their equipment. These can include computers, printers or even forklifts. Additional dependencies and their components are also things businesses must keep track of. For example, businesses must keep an eye on their distribution channels and supply chains, whether on the production or consumer side.
A business that keeps track of all its physical resources and their dependencies is always prepared for emergencies. Knowing what types of computers or trucks the business owns can help it know where to find parts, when and how to source alternatives, or even which repair companies to call in case of an emergency.
Human Resources
Regardless of the business you are in, people will always be a foundational resource for it. As with other resources, the right people can help a business succeed, and the wrong ones can make the business struggle or even fail. For this reason, businesses must establish robust hiring and performance-measuring strategies to ensure they retain people who add value to a business.
Hiring people for specific roles with well-defined responsibilities is always best, so they know what is expected of them. Some people can fulfil various functions, such as a human resource manager who also handles accounting in a small business. Additionally, the people you hire can help the business in ways that you might not have thought of before.
They can bring marketing by being known in their field and technical value by being experienced in the role they are hired for. They might also help create critical relationships with current and potential customers by having people skills. The right employee can also use their creativity which becomes crucial when launching new products and services.
They might also satisfy customers by solving specific problems or meeting certain needs and have experience in specialised areas such as networking, sales or fundraising.
Once a business has the right people in the right positions, it should find a way to retain them so that they continue providing value. It should also provide a path for them to keep improving their skills and to keep them up to date because things move very fast in the modern world.
Water Resources
Water is a critical resource for life and business too. Businesses use water in different ways depending on what they do. At the lowest levels, businesses need water for their bathrooms and kitchens if they have in-office employees. They also need water to keep their premises clean to provide a conducive working environment for theme employees. On a larger scale, some businesses need more water than others. For example, any agricultural or manufacturing business will need more water than one with only one or a few business locations.
Depending on how it is used, water can be a significant business expense, especially for businesses that require a lot of it. This is one area where businesses can save money, and it starts with comparing water rates to find an affordable supply. You can compare business water rates using various platforms, including Business Water Shop. They work with trusted water suppliers to make it easier to find better rates and switch business water contracts so that water does not remain a significant expense for your business.
Financial Resources
Every business needs financial resources at the start and to continue existing. Capital is arguably most important when starting or expanding the business by opening new locations or hiring new people.
Businesses have different ways of accessing the financial resources they need. They may sell a product to customers and use the profits to pay for various business expenses and requirements. They may need a line of credit where they get access to a limited fund that they can borrow from. A business can take money from the fund until it reaches the limit set. Businesses can repay the amount borrowed immediately or over time, depending on their agreement with a lender.
Lastly, a business can access financial resources through a loan. Loans are very popular for businesses that can show they will be able to pay back what they borrow. In some limited cases, a lender can consider a loan if the business has significant assets even though it has less than satisfactory cash flow.
Once the business has the financial resources it needs, it can use them in various ways, including to pay for obligations like rent and payroll or to take advantage of emerging opportunities. They can also use it to cover emergencies and for growth through expansion.
A good relationship with lenders, banks and investors is a strategic move that any business owner should consider.
Intellectual Property Resources
Every business owner knows something other businesses do not, which is how they can stay ahead of their competition. Such knowledge can be in different forms, including product design, software and algorithms, or manufacturing. Having this knowledge is not enough as business owners should secure the right to it. Otherwise, other businesses can take advantage of it, and your business will lose its competitive edge over its competitors. Filing patents, trademarks, and copyrights is the best way of doing this.
Other forms of valuable knowledge are just as critical but less obvious. For example, businesses should protect exclusive partnerships, processes, branding and customer lists. A business can also acquire knowledge from another and maintain a relationship with the other business so they both benefit.
Every business should have access to the critical resources it needs. Leveraging and managing these resources is critical for ensuring they help the business achieve its goals and objectives. Businesses should also know when to let go of a resource if it no longer serves them well.
