Determining Intangible Value
While Tangible value is mostly computed as a multiple of EBITDA or other financial numbers, determining intangible value requires a deeper look into a company or organization. Items to explore include:
- The uniqueness of products and services, patents, or other intellectual property
- Brand name and recognition
- Equity
- Potential franchise value
- Goodwill
- Market and industry (location)
Most buyers approach a company based only on tangible value, without knowing the intangibles. Experienced buyers will learn the intangibles by doing a diligent review of the business and seeing how they compare to the industry and competition. This will also require a thorough analysis of other buyers in the market and an attractive marketing campaign to reach out. If you’ve thought about exiting your business, and need help getting an unbiased opinion of your market value, let us take a look.
