Just deciding it’s time to add new assets or replace existing ones won’t result in your best ROI…planning will.
When businesses decide to make investments in new assets, they need to take a flexible long-term planned approach to ensure the most cost-effective decisions are made. So says Patrick Gaskins, AmeriQuest’s vice president of Financial Services in a recent blog on Monitordaily.
He outlined the three major steps that finance executives need to take before making the actual purchase:
- Identify your need: increasing productivity; replacing an asset at the end of its lifecycle; expanding existing capabilities
- Identify the best option: Be mindful that the best asset may not give you the best ROI
- Decide which asset will give you the maximum value in both cost and efficiency for your asset
Gaskins calls for a full ROI analysis for each of the assets you’re considering in an effort to see how that asset will add to the company’s bottom line. Finance executives need to think strategically as they project what the enterprise’s needs may be over a five-year period, and plan accordingly for both asset acquisitions and dispositions.
As Gaskins notes, planning can’t take place in a vacuum, so consider internal and external variables when making decisions. Economic uncertainty, legislative changes, and market conditions need to be looked at as carefully as do hiring intentions and new business goals.