Many of the over 33 million small businesses in the US function as online-only or sole proprietorship operations. In general, these businesses have a minimal investment in physical assets. After all, your average writer just needs a laptop.
Yet, businesses like the approximately 745,000 construction businesses in the US make massive investments in physical assets like tools and even forklifts. These assets can cost thousands or tens of thousands of dollars.
Those businesses don’t want their assets walking away. Enter asset tracking.
Not sure what asset tracking is or how it can benefit your business? Keep reading for an overview of the benefits of asset tracking.
What is Asset Tracking?
Asset tracking is quite literally when a business uses technology to keep an eye on its physical assets. Mind you, assets are a separate thing from inventory. Assets may include:
- Mobile devices
In essence, these are things that provide value directly or help you generate value.
Asset Tracking Methods
There are a few methods of asset tracking. One of the more common methods is GPS tracking. You can install a GPS tracker on a wide range of assets, but they’re most commonly used on vehicles and heavy machinery.
You can also use radio frequency identification tags, although RFID tags work best in closed systems. For example, some airlines use RFID for luggage tracking.
This works because the luggage typically stays in the hands of the airline or airlines until you get it back. As long as your luggage stays inside the airports, the equipment is one hand to receive data from the tags.
If you must track assets at off-site locations, GPS is often preferable because the data transmits via satellites. The tracking doesn’t depend as much on in-house equipment.
With the basics of asset tracking out of the way, let’s look at the benefits.
Asset losses can eat away at a company’s bottom line. For example, let’s say that you provide your employees with laptops and mobile devices to avoid the problems of bring-your-own-device.
Now, let’s say that employees leave the business and don’t turn in those assets. Even if you only provide mid-range laptops and smartphones, the cost of replacing those assets can run you over $1000. It doesn’t take a lot of employees leaving with that hardware before you start feeling the pinch.
That’s without even considering the problem of lost assets or stolen assets. Asset tracking can help you track down those assets in the event of an employee leaving the business, losing assets, or having assets stolen.
Anything you can recover without too much effort is money you keep on the books. In essence, asset tracking is an investment in asset security.
Asset Life Extension
Assets often represent a substantial portion of a business’s upfront and, to a lesser extent, ongoing costs. Extending the life of those assets helps a business to spread out the ongoing costs of assets.
For example, let’s say that you use a company vehicle for local deliveries. Using a GPS device can help you project maintenance schedules by tracking the actual mileage on the vehicle over time. If you know you put an average of x miles on the vehicle per week, you can project that into the future.
By the same logic, you can also project future replacements. For example, you can expect anywhere from three years to five years of working life from your average laptop.
If you track which laptops spend the most time off-site or traveling, you can reasonably assume that those laptops face the worst wear and tear. You can schedule those for replacement around the three-year mark. You can leave the laptops with a low percentage of off-site time for the four-year or five-year mark.
Resource allocation can often prove a challenge for businesses, particularly businesses that have a lot of assets out in the field. A construction business, for example, might have two, three, or more projects all running at the same time.
While the business may have enough duplication in tools to cover most of its needs, the business owner may only buy one or two of the most expensive pieces of equipment. They might well reason that they can schedule the expensive or particularly large pieces of equipment to move from site to site.
That generally works, assuming everything goes well. Yet, as projects multiply, oversight often diminishes. Asset tracking lets you know where those big pieces of equipment are located at any given time.
If you need one of those pieces of equipment at a certain location, you can see where they are and redirect the closest one to the new location.
While new business owners sometimes find the idea outlandish, most businesses that last for a while find themselves accumulating assets they don’t use. For example, they replace one piece of equipment with a better or more powerful version out of necessity.
Yet, they still have that old piece of equipment sitting around in storage. The thinking usually goes that you’ll find another place to use it.
Sometimes, that actually happens. Just as often, though, the asset just sits around.
Asset tracking can help you keep track of how long an asset goes unused. If assets reach a certain threshold of non-use, you can schedule the asset for sale. That lets you recoup some of your initial investment in the asset or generate some working capital for new assets.
Asset Tracking and You
Asset tracking provides a number of important benefits for your business. Right at the top of the list for many businesses is loss prevention. Any time you can hang on to your assets, it’s good for profitability.
Asset tracking can also help with resource allocation. Knowing the location of assets lets you redirect them efficiently. You can also see benefits in terms of cost savings, as well as asset life extension.
Lone Star Tracking specializes in asset tracking. For more information about our asset-tracking devices and services, contact Lone Star Tracking today.