In our ongoing process of intentionally designing business practices, we are today introducing our equipment policy.
We learned accumulating things is even easier as an organization than it is as an individual. In a phase of scaling up, new equipment is purchased, but when scaling down we are left with those physical remains. Moreover, purchased equipment in value of ≥€250 is considered an asset under German tax law, which makes them a special kind of stuff.
Over the past four years, a lot of our policy has been in place implicitly. In preparation for our forthcoming “Open Startup” strategy, we are now deciding to formalize our equipment policy. We understand equipment to be any physical asset.
Equipment is a commitment and purchase decisions need to take this into account. On a tax basis, depreciation occurs differently for all kinds of equipment. Most of our equipment depreciates over three years (e.g., laptops, computer screens), which we consider only a minimum. We use our equipment for at least four years. Equipment used beyond the minimum depreciation lifecycle or four years (whichever is highest) will be rewarded.
We are an information based company - the equipment we use are mostly computers and peripherals. These are based on microprocessors, circuit boards, and other advanced circuitry, which requires a lot of earth’s resources, energy, and water to produce (amongst other things).
From here on out, we factor the equipment’s resource lifecycle into purchasing decisions, to the degree that we prefer information clarity (and more expensive) over ambiguity (and more economical). However, spend is correlated with emissions, and we will aim to make a balanced assessment of emissions, needs, and clarity. This will help us further our sustainability mission.
We actively choose to repair devices still in the four year lifecycle. Repairing is a core value for what we try to achieve overall, and repairing equipment is a perfect manifestation of that value.
Planned obsolescence by is a business strategy by manufacturing companies that causes a lot of waste. This either by making it hard to repair devices or making them extremely short-lived. Actively choosing to repair devices is an attempt to resist planned obsolescence and focus on devices that are repairable where possible (in line with the Right to Repair).
The only exception to our repair-first rule is when the equipment is “totaled,” that is, where the price to repair exceeds the current asset value.
Minimizing equipment means that we prefer multi-functional and adaptable equipment over single purpose equipment, and that when equipment has served its lifecycle and is no longer used, it is sold or given a second-life, instead of piling up.
Strategies to reduce equipment piling up can include community purchase programs, where we simply offer things to our community members or donating them.
Currently, we maintain a spreadsheet with a basic inventory list, disentangled from our accounting and depreciation processes. Real-time inventory tracking means that we have a more sophisticated mechanism with which we can assess current complete inventory value, upcoming end of life equipment, project depreciation rates, and track equipment emissions estimates.
Intentionally designing a business is hard. This equipment policy provides focus in how we develop our inventory over time. We are committing ourselves to work towards having a clearer assessment of our inventory at any time and build our business intelligence capacity.
We’ll be introducing and revising our policies for a long time to come - we get overwhelmed when we see this large list of template policies from Workable. Thanks for following along on our journey of building an Open Startup!