Business resources are anything and everything that helps a company operate and do business. This can include the use of human capital, natural resources, tangible resources such as property or production machinery, intangible resources such as brand image and knowledge, financial resources and anything else a particular business may use to make a profit. Every business resource used to produce goods or to serve customers has an economic value.
The Value of Business Resources
The effective management and use of business resources is a strong indicator of the financial success of a company. A company that efficiently uses all of its different business resources will perform at a higher level and make more money than companies who do not. Every business resource adds a certain value to the company; the value is determined by the quantity and quality of the resource. For example, the value of oil as a business resource depends greatly on quantity available while the value of human capital knowledge is about quality.
The most important business resource for any company is its human capital, that is, the combined skills, efforts, abilities and knowledge of a company’s workforce. Employees have the capabilities to transform raw materials into valuable products, or knowledge and skills into services. Whether employees are paid hourly, by commission, or by annual salary, the human capital controls day-to-day operations, including managerial decisions and customer service, knowledge or business know-how gained from research and development or innovation, and therefore the growth of any business. Getting the most out of every dollar paid to every employee will greatly improve a company’s bottom line.
Natural resources are any resource made from the natural environment such as paper, oil or minerals that a company uses to operate its business. The value of natural resources varies depending on whether it is a renewable or non-renewable resource; renewable resources will be easily replenished and reproduced naturally while non-renewable resources cannot be replaced after human consumption.
Business resources also include any tangible good that helps the company operate, such as property or rent, production machinery, supplies for final product, transportation, and overhead such as Internet and electricity. Tangible resources vary greatly across different industries.
An overlooked business resource is any intangible resource such as brand image, goodwill or patents. Many businesses have a competitive advantage and survive by just excelling in brand image, such as McDonald’s golden arches, or by protecting important intellectual property, such as a patent for new technology. Technology can refer to tangible resources used by the company such as computers, servers or telephones, or as an intangible resource if the company is focused on innovation and improvement of technology.
Financial resources encompass any source of revenue a company has including sales, loans, and investments.