business owner doing capital budgeting methods

Capital Budgeting

Capital budgeting helps business owners and executives identify which fixed-asset investments projects are viable. Many business owners must weigh the investment cost of product lines, warehouse space, or resource in personnel to keep the business growing. 

Often, many business owners fail to see that technology platforms are not just investments in software, but people and processes too.

As change management specialists, we help clients understand and weigh the costs of implementing technology by using capital budgeting methods.

Capital Budgeting Methods

There are several capital budgeting methods. The most common we focus on with clients are:

  • Constraint Analysis- Constraint analysis looks at where the bottleneck is happening in the organization and focuses on the heaviest investments there.
  • Payback period- Payback period analysis is the process of looking at how long it will be to generate significant cash flow from a project to pay back the initial investment.  
  • Avoidance analysis- This analysis looks at whether increased maintenance can prolong the life of an asset rather than investing in a replacement asset. 

We utilize all three to look at each client’s tech stack and assess if an inventory management system is right for them and which ones are based on cost. We also utilize this analysis to showcase that inventory management systems are not just overhead but an investment. 

Inventory Management Systems as an investment

Investment management systems are an investment in technology, process, and people.

At Clearinity, we don’t just pay attention to your initial implementation costs. We also consider the future process and people costs that result from technology. We focus heavily on where and when your technology investments should happen. This is to help you best achieve your growth goal posts. 

Aside from that, we also provide the heavy lifting at fractional costs. This is the reason why we have built the four-step process to utilize the capital budget framework. Aside from that, this also serves as your guide to the appropriate technology stack for ultimate growth hacking.

Clearinity’s Process Is Here to Help You

Our Clearinity process helps you stop your operational hurdles, so you can scale faster with more ease. We aim to become extremely helpful in fixing your business problems today and impact your future. 

Here are the steps to our Clearinity process:

  • Discovery: our consultants help guide you through analyzing current bottlenecks and future growth opportunities for your business.
  • Formal Recommendation: This leads you towards the best technology to invest in.
  • Implementation: This is where we do all the heavy lifting while your team gathers other resources
  • Support

Through this process, we aim to help guide you towards a clearer decision and growth strategy.