Have you ever wondered why two companies in the same industry with similar financials and growth projections can be valued completely differently? What makes a buyer pay a premium for Company A while not paying a premium for Company B? Why can two buyers look at the same company and come up with valuations that are widely divergent? Aren’t both buyers essentially using the same projected financials to determine the “worth” of a potential investment? The answer to all of these questions can be summed up in two words: intangible assets.
The official definition of intangible assets is found below:
The assets of a business that have value but are nonphysical and not shown on the balance sheet
Intangible assets (also known at “off balance sheet” assets) are those items that essentially make your business unique. Their relative value will vary from buyer to buyer. As part of your evaluation process, it is vital that you do a complete analysis of what sets your company apart from other companies in your industry.
Quite often, identifying intangible assets is a very difficult process for a business owner to accomplish. We find that because business owners are so close to their companies, they often take what makes them unique for granted. Or they simply don’t have the time to adequately brainstorm a full list of intangible assets.
To help you out, we have compiled a sample checklist that you can use for your company. This list is designed specifically to focus on intangible assets for manufacturing enterprises. However, many of these apply to any business regardless of its focus. Use this list to help you brainstorm your company’s specific intangibles. (Note: This is simply a sampling of possible intangibles.)
By no means is this list exhaustive. Nor does it cover all the possible permutations and intangibles that your company may have. If you are attempting to market your company on your own, we would strongly suggest that you set aside three to four hours to meet with your trusted advisors who can help you brainstorm on this topic. This step is so vital that we cannot stress it enough.
When you develop your list of specific buyer types, you will base whom you approach on these intangibles. Again, each buyer will value what you do differently. If you do your homework and clearly document what makes you unique, your odds of finding a buyer willing to pay a premium for your business go up dramatically.
If you are fortunate enough to be using an M&A advisor, they will do most of this work for you. They will have the experience needed to ask you key questions in order to really get to know your business and to delve into areas that you may take for granted. If you would like to learn more about how the Generational Equity evaluation process works, please contact us for a free, no-obligation consultation. If you qualify, you will be invited to attend one of our M&A workshops that we hold around the country on a weekly basis. While at a workshop, you will learn more about the value of intangibles and how they can be used to find the optimal buyer for your business.
© 2011 Generational Equity, LLC All Rights Reserved
it all started with a conference.
start your story today,
speak directly with one of our senior advisors +1-972-232-1121
The information we learn from customers helps us personalize and continually improve your experience. Here are the types of information we gather.
We receive and store any information you enter on our Web site or give us in any other way. We do not sell or rent your personal information to others without your consent. We use the information we collect only for the purposes sending promotional information, enhancing the operation of our site, serving advertisements, for statistical purposes and to administer our systems. We DO NOT use third parties to provide customer service, to serve site content, to serve the advertisements you see on our site, to conduct surveys, to help administer promotional emails, or to administer drawings or contests, but reserve the right to do so in the future without advance notice.
Generational Group’s affiliates are all part of one corporate family, they work with one another and may work together to provide services to you. The sharing of your information among affiliates enables Generational Group to serve you more efficiently and makes it more convenient for you to do business with Generational Group. Generational Group is permitted by law to share information with its affiliates. All of our affiliates follow similar privacy policies.
For reasons such as improving personalization of our service, we might receive information about you from other sources and add it to our account information.
Generational Group may license the use of its intellectual property including but not limited to its name, likeness, and logo for the use of affiliated offices. Such affiliated offices may not be owned, controlled, managed, supervised or staffed by employees, officers, or agents of Generational Group. Affiliated offices may be independently owned and operated. For more information about a particular office, please contact Generational Group at its office in Dallas, Texas.
This page may contain other proprietary notices and copyright information, the terms of which must be observed and followed.
Information on this web site may contain technical inaccuracies or typographical errors. Information may be changed or updated without notice. Generational Group may also make improvements and/or changes in the products and/or the programs described in this information at any time without notice.
Generational Group does not want to receive confidential or proprietary information from you through our web site. Please note that any information or material sent to Generational Group will be deemed NOT to be confidential. By sending Generational Group any information or material, you grant Generational Group an unrestricted, irrevocable license to use, reproduce, display, perform, modify, transmit and distribute those materials or information, and you also agree that Generational Group is free to use any ideas, concepts, know-how or techniques that you send us for any purpose.
Our computer system protects personal information using advanced firewall technology.
Information Generational Group publishes on the World Wide Web may contain references or cross references to other products, programs and services that are not announced or available in your country. Such references do not imply that Generational Group intends to announce such products, programs or services in your country. Consult a Generational Group representative for information regarding the products, programs and services which may be available to you.
Generational Group makes no representations whatsoever about any other web site which you may access through this one. When you access a non-Generational Group web site, please understand that it is independent from Generational Group, and that Generational Group has no control over the content on that web site. In addition, a link to a non-Generational Group web site does not mean that Generational Group endorses or accepts any responsibility for the content, or the use, of such web site. It is up to you to take precautions to ensure that whatever you select for your use is free of such items as viruses, worms, Trojan horses and other items of a destructive nature.
IN NO EVENT WILL Generational Group BE LIABLE TO ANY PARTY OR ANY DIRECT, INDIRECT, SPECIAL OR OTHER CONSEQUENTIAL DAMAGES FOR ANY USE OF THIS WEBSITE, OR ON ANY OTHER HYPERLINKED WEBSITE, INCLUDING, WITHOUT LIMITATION, ANY LOST PROFITS, BUSINESS INTERRUPTION, LOSS OF PROGRAMS OR OTHER DATA ON YOUR INFORMATION HANDLING SYSTEM OR OTHERWISE, EVEN IF WE ARE EXPRESSLY ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
Furthermore, all information contained within this website is the property of Generational Group.
Success, you have been added to our list.