To ensure that both tangible and intangible assets are properly protected and controlled, and exploited efficiently.
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 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.
- 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.
By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.