How Intangible Assets Drive Business Performance, Competitive Advantage and Company Value

Today more than 90% of the value of Fortune 500 companies is comprised of intangible assets. For privately-held companies, the value of intangible assets ranges from 65-85%. It’s critical for management, boards of directors and business owners to understand: 

• The enormous impact intangible assets have on value, revenue and sustainability

• How these assets combine to create synergies, efficiencies and competitive advantage

• The extraordinary fiduciary responsibility inherent to stakeholders, investors, partners and employees to recognize, assess and develop these assets

What are intangible assets? These assets are typically less apparent than tangible assets, such as machinery, buildings and land, or current assets, including cash, receivables and inventory. They include the talent in staff, the company’s culture, the brand, reputation, customer relationships, technology, business processes and intellectual property such as patents and trademarks. Intangibles as an asset category include many of the factors that give a company its ability to drive better-than-typical earnings.

 Whether seeking to improve overall business performance, preparing to sell the business, or looking for investors to help fund the business, it’s important for a company to perform a comprehensive assessment of its intangible assets, communicate those assets and remediate where necessary. Doing so will help drive earnings, harness the company’s full potential, and ensure its sustainable competitive advantage.