Calculate Your Equipment's ROI

Every business expenditure — from personnel to equipment in your inventory to software — is an investment in your company. Naturally, you want to ensure you get the best investment return. How can you determine that? There’s no mystery or obscure mathematical formula. You simply have to ask the right questions:

1. How many pieces of equipment do you have?
   You’ve already got (or should have) a complete hardware inventory, so this shouldn’t be hard to figure out. If you don’t, this is Step One. It’s crucial that you stay on top of your equipment capabilities and needs.
2. What is their average cost?
   Some pieces are more expensive than others. For the purposes of this exercise, find the average by dividing the total cost by the number of individual items of equipment in your inventory
3. How many pieces do you have to replace because of loss or breakage?
   It’s impossible to eliminate completely, but you might be able to reduce it, which will improve your ROI.
4. What percentage of your inventory sits idle at any given time?
   Naturally, some extra inventory is necessary as backup or inevitable due to last-minute production changes, but too much idle equipment represents a sunk cost — money invested that is not bringing a return.
5. How much time is spent tracking down equipment that has gone MIA?
   Is it an hour a week? Two, three, or more? Over the course of a year, that adds up.
6. And lastly, what is the cost of that time?
   If your tech crews or office staff are busy chasing after errant cables and cameras, that’s time they can’t be put to use for more appropriate and productive purposes.
   

E.g. For an inventory of around 250 pieces of AV equipment, savings are almost $15,000.