7 Examples of Capital Resources (Plus Money-Saving Tips)
Updated February 3, 2023
A company uses a variety of assets to fulfill a purpose and meet financial goals. Capital resources are vital to the primary functions of a business, and investing in these can provide many benefits to an organization. If you're seeking a role in management, business or a related field, you may benefit from learning more about this important type of resource.
In this article, we define capital resources, describe how they differ from natural and human resources, highlight several examples of these types of assets and provide steps for reducing business costs.
What are capital resources?
Capital resources are assets that a business uses to manufacture goods and provide services. These assets may include machines, buildings and vehicles. With high-quality capital resources, organizations can perform operational activities efficiently, meet client expectations and earn profits.
Related: 9 Types of Capital and Examples
Capital resources vs. natural and human resources
Capital, natural and human resources are all essential aspects of production, but they differ in a few key ways. Natural resources are materials from the environment in their raw, unaltered forms.
For example, oil, metal and wood are all natural resources. In contrast, capital resources like equipment are human-made. Human resources are people that contribute labor to a firm. While capital resources are passive, human resources are active.
Team members apply capital resources, in combination with their skills and knowledge, to generate goods and services for an organization. HR might also refer to a business department that manages employees.
7 examples of capital resources
Here are a few examples of common capital resources:
1. Manufacturing equipment
Manufacturing companies make use of specialized equipment to transform raw materials into components and final products. For example, employees might operate a milling machine to cut and shape steel. As this equipment enables staff to facilitate production and develop goods, it counts as a capital resource.
Employees wield hand and power tools like screwdrivers, drills and hammers to perform tasks and work efficiently. For example, a team member may use measuring tape and a level to measure and cut wood according to precise specifications. As tools are essential to safe and effective operations, they're an example of a capital resource.
A company's property is a capital resource, as it offers a space in which employees can conduct work. For example, manufacturing professionals assemble commodities in a factory and store them in a warehouse. Employees at a garden center may rely on greenhouses and retail stores to grow and store plants.
Related: What Is Scalability in Business?
4. Company vehicles
Because people drive company vehicles to aid in manufacturing processes or deliver services, these vehicles are capital resources. For example, a farm manager may drive a refrigerated truck to deliver fresh produce to a restaurant. A construction company might use heavy excavators to dig trenches and lay building foundations,
5. Computer software
Although intangible, computer software enables employees to create products and serve clients, so it's a capital resource. For example, a manufacturing professional may use a CNC programming system to control machinery. A manager may monitor various metrics through management software to keep track of employees and ensure they're completing assignments.
6. Office supplies
Team members in office environments depend on a variety of supplies to conduct operations. An item as simple as a desk is a capital resource because it aids an employee in completing their work. Other examples of resources like this include computers, notebooks and calendars.
7. Proprietary work processes
Most examples of capital resources are physical items, but processes can also be part of this category. A proprietary work process belonging to a business can give the firm unique value in a market. This resource enables employees to construct unique goods and deliver unparalleled services, attracting clients to the organization.
How to save money on capital resources
Saving money on capital resources can help a business reduce its operational costs and increase profit margins. It can also allow company leaders to reinvest funds into other areas, as necessary. Here are steps you can take to decrease spending on capital resources:
1. Invest in high-quality resources
By investing in high-quality machinery, tools and other resources, you can avoid paying repair and upgrade costs. For example, a new vehicle, while typically more expensive than a used vehicle, may be more advanced, durable and long-lasting. A used vehicle, while cheaper, may break often and require restoration.
2. Repurpose underused resources
Repurposing underused equipment, tools or business properties can make them more valuable to the business. For example, if you own an empty, unused storage warehouse, you can transform this property into a garage for a fleet of vehicles. This allows you to avoid the cost of renting a garage space for the vehicles and establishes a new purpose for the space.
3. Care for current resources
When you treat tools, buildings and other resources properly, you can maintain them for long periods and get substantial returns on your investments. You can also avoid spending money on replacements. Train employees on how to use and take care of company equipment effectively.
It's also helpful to promote safety standards on a daily basis. Detailed instruction and ongoing support maximize employee efficiency and reduce the degradation of resources from improper use.
4. Build partnerships
Expanding your professional network can lead you to business opportunities. Company leaders can partner with other firms to share and save money on capital resources. In addition, connecting with other successful establishments may help you determine the most cost-effective and high-quality resources to purchase.
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