Published August 28, 2012 | Updated January 13, 2020
The business environment constantly changes, but one thing doesn’t: cash is the most important asset for any operation. And businesses are always looking for ways to do more with less of it.
The first step in an effective cash conservation strategy is to adopt a corporate mindset that is focused on continuous improvement. The only way to do more with less is to improve how you use what you already have. It’s an ongoing process of reengineering and reinvention that aggressively seeks to streamline and refine every system and procedure a business uses.
In many cases, streamlining a business process to improve efficiency – and profitability – is simply a matter of reengineering how the process is actually executed. By redefining roles or reordering process steps, it is often possible to dramatically increase efficiency. What it takes is the motivation and patience to review all workflows, plus the knowledge and experience of how best to improve them.
Sometimes, more dramatic changes are necessary. As technology continues to advance in all areas of our lives, new equipment can substantially improve business operations. Regardless of what industry a company serves, new technology and equipment can increase efficiency and reduce cost. This is why businesses must be prepared to make ongoing investments in equipment and infrastructure to stay competitive and profitable.
But what if your budget is tight and you don’t have the cash to invest? That is a problem that many companies can solve by financing the needed equipment instead of dipping into cash reserves or tapping a line of credit.
Financing conserves cash. Financing typically doesn’t require an upfront payment, and it’s separate from any existing line of credit. This results in operational flexibility because cash is freed up so it can be used whenever and wherever it’s needed, instead of being tied up in equipment.
Financing can also help mitigate asset-related risk, such as technology obsolescence, by including provisions for technology refresh. If financed equipment is superseded by new technology, a business can simply turn in the old equipment for an upgrade.
In every economic climate, businesses have to adapt and adjust their processes and procedures to compete and succeed. Aside from process reengineering, the implementation of new equipment is often necessary to be able to do this effectively. And financing this equipment can become a strategic advantage for businesses of any size.