Invest in your Resources - Kotak Bank

Indian business mentality is popular mainly for two things. One is their risk taking ability and the other is their belief in earning enough for the next 7 generations. Looking at today’s high and increasing standards of living, saving for the next generations requires one to earn a humungous rate of return. How much ever difficult it sounds, the task is not impossible. A golden rule to achieve high return on efforts is very simple. All you need to do is keep your resources updated and happy, thereby ensuring optimum utilisation of the same.


What are Business Resources?

Anything which allows a company to operate, in other words everything that enables a firm to perform its daily business activities comprises of that firm’s resources. Basic resources of a business are land, labour and capital. These comprise of the internal resources of a company. External resources like natural resources or economic resources also play an important role in the smooth functioning of a company.

Apart from the financial resources like sales, investments and loans, a company should also concentrate on other internal resources. They mainly comprise of physical resources, human resources and the intellectual resources of your business. These resources ensure optimum return of efforts, leading to the firm’s higher overall growth.


Ways to Invest in your Resources & Benefits

As mentioned above, internal resources are the resources on which company has its own control while the external resources cannot be controlled. A business can only keep provision for coping with their external resources. Here’s a list of three most important internal resources, apart from financial resources, and ways to invest in these resources.


1. Physical Resources

They comprise of all the resources that one can touch, feel and see. These help one to undertake daily activities quicker and with less effort. These resources mainly comprise of building, vehicle, machinery, furniture etc. called business infrastructure on the whole.


How to Invest in Physical Resources?

Investment in these physical resources is necessary not only to provide better services but to also increase efficiency of business activities. An entrepreneur can invest in the following forms of physical resources:

  • Purchase – For efficient working of a business, suitable infrastructural facilities need to be purchased. These facilities need not be very costly or very low in value. Facilities which will be suitable to the company in terms of usage as well as price need to be provided for delivering higher results. For example – In case of higher monthly sales, one may need to buy another vehicle to transport these additional products. Thus a new truck may need to be purchased instead of doing 2 rounds of the old truck. This will reduce time taken for delivery as well as reduce higher wear and tear of the existing resource.
  • Maintain – Periodic checks to determine need for repairs or other maintenance activities is necessary to increase the longevity of the asset. For example – Periodic repairs for vehicles is a common practice but one should also invest in period checks of their buildings for cracks, leakage or any other problem to be solved right in time.
  • Value Addition – Several value added investments should also be made in order to enhance the productivity of your physical asset. Like utilising a share of your profit in increasing your storage space, introducing advanced communication equipment etc.
  • Disposal – Disposing your assets at the appropriate time is also an important aspect which leads to investment in purchase of new assets. The time when output gained from a particular asset is lower than the investment in it, is the time one should consider disposing the asset and investing in a new one. This also reduces efforts working on the old asset as well as increases efficiency which the new asset helps to bring in business.


2. Human Resources

In recent times, human aspect of business has gained prominence. Human resources are the employees and other personnel working in your business who are regarded as assets because of the skill set and abilities that they bring into the company. Human resource consists of both, management, that is the employer, as well as the employees or workers of the business.


How to invest in Human Resources?

Investing in the tools which your employee base feels is correct brings in high productivity, dynamism and greater efficiency in the company. Higher salary is not always a measure by which you can motivate your employees to do their best at work. Investing in the following activities has a high potential of giving your company that competitive edge over your competitors, reducing overheads with increased efficiency.

  • Recruitment and Hiring – Recruitment and hiring process is the first form of communication that your company has with prospective employees. People who connect with the work culture or mind set, who share the same goals can be hired, thus increasing productivity.
  • Communication and Employee Relation - Communicating new policies, collecting feedback and sharing enrichment opportunities bond employees to the mission and vision of the company. 
  • Competitive Benefits – Apart from salary, employees today appreciate other compensations as well. Flexible working hours, total health and wellness in addition to standard health insurance and retirement plans are attractive to today’s employee. This not only attracts employees but also helps in retaining them with your business.
  • Training and Development – Investment in educational and vocational training builds an employee’s loyalty towards his organisation. Providing qualification relating to their work also helps increase an employee’s work efficiency yielding better results. Providing diverse and creative work to one’s employees leads to their overall development.


The above mentioned measures lead to a highly motivated workforce, low attrition rate, increased employees satisfaction and loyalty towards the company, develops employee engagement as well as a healthier work culture. All these in turn highly benefit the rate of return on your investment in human resource.


3. Intellectual Resources

Intellectual resources are those new things which you have come up with and believe no one else has thought of. It mainly comprise of patents, proprietary knowledge, R&D processes, brands and customer database. With heavy usage of the internet, it has become very easy to steal one’s intellectual property mainly because a lot of people have access to that information at the same time.


How to invest in Intellectual Resources?

Investing in intellectual resources is not always necessary. However, if you think your business has something which no one else has, be it a process, product, technology or your logo, it is advisable to act quickly and file your intellectual property exclusively under your name.

  • Qualify for patent – Patent is for a specified duration of time. It is better to file a patent before someone else comes and uses the fruit of your labour under their name. Early use of a rare patented product leads to heavy patent income as well as gives a company an edge over their competitors.
  • Research and Development – In today’s changing economy, constant R&D is very important. R&D investments may not always lead to a successful new output, but one successful output outweighs the cost of all the other failed attempts. Investment in R&D improves technological capabilities as well as brings innovation to the firm.
  • Investment in your Brand – A trademark of your logo, name or design particularly helps you from heavy losses that one may incur in case of misuse of these properties by someone else.
  • New Software – Digitisation has compelled every business to introduce software based working systems. Investing into high end software reduces time, cost and increases accuracy thereby increasing the overall productivity of your business.


It is very tempting to reinvest your money into new product development rather than investing in protecting your intellectual property, but negligence in this aspect can not only cause loss of lucrative opportunities but also incur huge losses in terms of funds as well as goodwill.

All in all, invest in your own resources first and then think about investing in the financial markets. This practice will help you drive your business to new levels. So, all you need to do is concentrate purely on enhancing your business activities and leave the rest for experts who have their best interest in your growth.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.