5 major Resources needed for a Company – What do you think is the most important one?
Beginning anything means a certain amount of risk. This does not mean that people are shying away from start-ups. The ones who are successful are the ones who do a lot of planning and develop a realistic business plan. Along with this planning, one also needs to consider the various resources that a company needs in order to function.
The major resources available in an organisation can be divided into the following:
- Machinery & building
These are the fixed resources of a company. These are the physical resources that cannot be moved. For any organisation, these resources are of utmost importance that cannot be ignored. These include your physical work space, connectivity, information systems, furniture and more. This resource could be one of the costliest.
- Raw material and finished goods inventory
Another important physical resource includes the raw materials as well as the finished goods inventory. These are highly volatile if it is processed.
- Transitional resource – Financial
This is the transitional resource of the company. This consists of cash, credit, and all money related aspects. It is often hailed as the most important component while starting a business as this is where the funding comes from. No matter how big or small your business is, cost will be involved. Financial resources utilize knowledge to convert raw material into finished product using human resources. This is why I call finance as a transitional resource.
- IP and knowledge
Intellectual Property and expertise involves aspects such as your brand, patents, copyrights, partnerships, and customer databases. Before plunging into a business, entrepreneur needs to gain as much knowledge as possible. This involves knowledge about the competition as well as the industry. This is what will help in making better decisions that are smarter and have more chances of success. There are multiple channels that help in this resource like SBA and the local Chamber of Commerce.
- Human resource
Then there is the Human Resource and according to me, this is the most valuable of all resources and a highly volatile resource as well. HR is an essential department of all companies, no matter the size of the company. An HR department focuses on making the most of employee productivity and protecting the company from any problems that may come up from the employees. There are many focus areas for this department and it includes recruitment, compensation and benefits, firing, and even updating oneself with laws that affect the company and its employees. Traditionally HR only focused on hiring, firing and the annual pay review and all this is now old school. These days HR has been spruced up for good and today it covers a much wider sphere of activity.
Especially in the past decade, Human Resource has been given more prominence. One of the major reasons of this is due to the active and volatile resources in most companies today, specifically the service industries where the resources are unpredictable.
I will talk more about HR in my next blog. In the meantime, do let me know what you think is the most important resource of a company. I would love to hear from you.