Sometimes they need a formal valuation for tax or compliance reasons. That’s easy because this is something a good valuation firm can do.
But most of the time, the person just has an unsettled feeling. That their boss or their colleagues or customers or any number of other people associated with their organization “just don’t appreciate how important” the intangibles of the organization really are. And they think that hearing a big number, say in the $millions will catch their colleague’s attention.
My answer to these kinds of requests is to talk about whether a monetary valuation is going to solve their problem. Think of a factory, if I told you that a factory is worth $5 million, what would that mean to you? Is it better than a factory worth $3 million? Who knows? Who cares? What’s important is what you can do with the factory.
Same logic goes with intangibles. Their monetary value isn’t that relevant for most business decisions. It’s more about what you can do with the intangibles, how well you can meet the needs of your stakeholders. Because ultimately, that’s who is going to value your intangibles: the people you work with.
These stakeholders are interested in the value you can create for them: how well your processes work, how well your products/services are designed, how smart your people are. If you think about it, this “value” is the most important value to your business. It tells you whether you are meeting the needs of your customers, partners and employees. If they are satisfied, they will stick with you and help you continue to generate growth and performance.
For more ideas on how to identify and measure your key intangibles, read our new paper Do you know which intangibles are driving your company's results?