How to Effectively Manage Company Property and Assets – Part 2 of 3
By Angel Rosario, Industrial Property Management Specialist, Defense Contract Management Agency (DCMA). If you have comments, please email it to Angel.Rosario@SmartBizPractices.com.
By reading this three part series you will be well on your way to understanding requirements optimized for efficient property management of your company and/or customer property.
In Part 1 of this three part series, I described why using the Federal Acquisition Regulation (FAR) property clauses may be an excellent guideline to help draft and implement your very own asset management system.
- Property Management
- Acquisition of Property
- Receipt of Property
The next crucial element of an effective property management is the element/outcome of records.
Fewer things are more important for a new business owner than maintaining the right records, accurately. Establishing a record that includes what property is on stock, how much raw materials, etc. helps prevent scrambling and loss of visibility. The element of records is a very important outcome because it touches nearly every other element and its inherent success. Maintaining records on each article acquired, consumed, maintained and dispositioned/delivered separates a failing business from a successful one.
A great way to measure a company’s records is by conducted periodic physical inventories. By recording and analyzing inventory results business owners are able to identify weaknesses and strengths in it’s property management system. For example, identifying a specific location, material item or piece of equipment that raises a higher risk for being lost can help business owners put procedures and checks in place to reduce said risk of loss.
Just as it’s important to ensure your company’s affairs are in order, periodic evaluation of sub-contractors, vendors, suppliers and organizations performing you services (such as website management) can help identify areas where competition is thriving and better services may be better suited for your growing business. Sometimes businesses fall victim to stagnation by doing things as they have always been done. Failing to schedule time to perform internal and external scanning of one’s environment can lead to waste and inefficiencies.
If your business is subcontracting portions of its work, it may be beneficial to evaluate the terms and conditions, to include updated flow down of terms and conditions. Numerous companies have felt scrutiny over suppliers’ unethical practices. As companies seek to lower expenses, some may choose to cut corners and/or award contracts to suppliers with lax or nonexistent oversight. Some recent examples include Lumber Liquidators, Apple, and Nike.
Many entrepreneurs clearly or loosely define an exit strategy for their businesses. The strategy might have goals to raise enough brand awareness that it can ‘’go public’’ , or it may choose to set up a self-sustaining business and sell it for a specific amount. In order to create a duplicable business I find it crucial to maintain records and reports that paint a a broad picture of your business. Some of the reports include financial records, reports of inventory discrepancies, cases of loss, self-assessments, and other requirements. Maintaining these records not only help the new owner continue the success you have previously built, but better helps you re-create your next project.
Even if you have no plans to sell your company, there is value in maintaining your own reports. The reports listed above provide a tangible and objective record you can evaluate identify areas of improvement and areas of concern. These reports can help your business spot trends, both negative and positive in nature.
This is part 2 of a three part series. In Part 1, we have described Property Management procedures, Acquisition, Receipt of Property. In Part 2, we have described Records, Physical Inventory, Sub-Contractor Control, Reports. In Part 3, we will describe Utilization, Maintenance, Disposition, and Contract Close Out.