Business resources explained

Every business entity has resources that are under the control of management. In fact, for a firm to be in operation it means it has the necessary amount of business resources. Money and humans are two primary types that help companies function probably. In this article, we discussed the term to some extent.

1. What are business resources?

Business resources are key resources that are needed for an entity to carry out operations daily. Without them, a company will be dormant. Also, if one or more of the resources are in the threat and weakness aspect of a SWOT analysis, it will affect the business negatively. 

For example, if a company lacks financial resources, it will be difficult to meet working capital obligations. This includes providing a regular supply of goods to customers and ensuring daily expenses are met. Below, we explain six types of business resources and their importance.

2. Types of business resources

2.1 Financial resources

These are cash and cash equivalents required for daily business operations. It comes in the form of capital, borrowings, and trade payables. When there are surplus financial resources, they are invested till future time when it will be required. Treasury bills, government bonds, shares, and debentures are investment vehicles that an entity can pick from. 

When there is a lack of financial resources, the entity will not find it easy to meet daily obligations such as day-to-day business expenses and purchase of goods and supplies for the entity. However, when cash is readily available, current obligations are met as and when due.

2.2 Human resources

These are employees of the organization. Employees are the most important component of any entity. This is true in all cases. Although, we are at the fifth industrial revolution that is characterized by Artificial Intelligence, the need for human resources cannot be overemphasized. 

Employees carry out the business performance obligations to its clients/customers. For them to perform at optimal levels they must be well trained and paid sufficiently. Where the staff capacity is weak, it has serious implications to the entity. Although a company may have all other resources handy, without the right staff quality things can go messy.

2.3 Intellectual resources 

This can come in two forms. The intelligence of the employees and employers; as well as, the intellectual property right of the entity. The intelligence of the entrepreneur and board of directors of a company is one area of intellectual resources. Before going into a business, it is important that the entrepreneur has a background knowledge of the entity.

Companies with intellectual property should file for copy and patent rights to protect their products against competitors. These properties might include a right protecting the company over a software it's developed.

2.4 Physical resources

Items of property, plants, and machineries are resources required for the smooth operations of the entity. In manufacturing business, physical resources like plants and machinery are needed in the production of goods that are sold. On the other hand, service firms may require specialized equipment, generators, and building space. 

Without physical resources, production/service per hour from each employee will be very low. Machines make things easy. It also speeds up the job, enabling employees to achieve more in less time.

2.5 Government resources

Social amenities provided by the government are useful to organizations in that country. Also, government policies can either encourage businesses to strive or bring them down. Politics, corruption, bad decisions by the government may affect business operations negatively than their ability to generate funds for operations.

In Nigeria, a handful of companies have left the country because of the high cost of operations, likely caused by the government decision to remove fuel subsidiaries, insecurity in the north, and foreign exchange rates.

2.6 Digital resources

The invention of websites, email marketing and social media platforms for businesses result in digital resources. Entities with digital platforms have used them in various ways. Such as attracting new customers, reaching old customers, informing customers of the latest product, services or promotions. It is also used as a public relation tool to protect the image of the entity.