One of the keys, when growing and building a business, is determining where the value is, and it may not be where you think. Most people are building a business to increase their wealth, to create financial security, to be successful. Later, if you have a buyer for your business, they are going to be interested in your value.
Recently I had an interesting discussion about where the value of a business is, and the person I was speaking with thought that there needed to be tangible assets. However, I don’t believe tangible assets are necessary. Your assets can be intangible as long as they are something of value.
Where are the different places your value could be?
#1. It could be your tangible assets. You could amass a business, perhaps real estate, or other investments where you have a lot of wealth and value in the things you are holding that you can transfer to a buyer.
#2. Your assets might be intangible, however. They could include a piece of intellectual property which you have commercialized. Perhaps a buyer wants to buy it to utilize it in their business for others. This could be software, or a patent, or a design for an engineering product. It could be know-how: how to do something. It could be trade secrets. It could be a customer list. If you know certain customers who buy regularly or bring in other business, that list of customers could be very valuable.
Your value could be locked in a lot of different places. There’s no one right or wrong answer for where the value should be in your business. However, since your business value could be in different places, understand that and know how you can unlock that value.
Where is the value in your business? How are you protecting that value? How are you commercializing and enhancing that value? What are you doing to make that value yours? Share your thoughts in the comment section below.
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This posting is intended to be a tool to familiarize readers with some of the issues discussed herein. This is not meant to be a comprehensive discussion and additional details should be discussed with your attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. Each case is unique. Past results do not guarantee future outcomes. This article should not be treated as legal advice to any person or entity. Freeimages.com/photographer Kimberly Vohsen.
About the Author
R. Shawn McBride is the Chief Innovation Officer at McBride For Business, LLC. His signature keynote, The 3 Laws of Empowerment, gives audiences an entertaining look at how they can prepare, plan and protect themselves. You can email R. Shawn McBride or (214) 418-0258.