Using the Value of Company Intangible Assets to Combat Tough Economic Times

In the world of business, companies own many different assets that have value coming in many different forms. These could be something as insignificant as an office desk or a file cabinet to something as valuable as real estate. Even their outstanding invoices and outstanding accounts have value since they all can be sold or leveraged as a form of monetization. One thing can be counted on with tangible assets, they all have an established market value since they are all physical and can be seen on a balance sheet.

Tangible assets are only part of the equation, however. It is a proven economic fact that almost seventy-five percent of a company’s value is located in intangible assets. What’s more is the fact that these assets, although not in physical form can be utilized as a source of value and real revenue to a company.

Intangible assets can be their own research and development department where new ideas are forthcoming, waiting to be introduced to the marketplace. Brand name or brand recognition is another major form of intangibles. Think of the many name brand companies and it will soon be understood the power of intangible assets. Software programs used by companies to produce or design their product is another excellent example of intangibles.

Unfortunately, management and the corporate board room in many companies across the world today fail to realize the impact their intangibles have on their bottom line because the cannot be seen on a balance sheet. Given today’s current economy many companies can ensure their survivability and sustainability into the post recession era if they can learn to break out of the brick and mortar mindset that has infected corporate America.

As stated above, seventy-five percent of a company’s value can be traced to intangibles and the source is being grossly overlooked. One major reason for the oversight is a lack of understanding and the inability of upper management to think out side the box. People within a company that have the ability to think outside the brick and mortar will have difficulty in presenting new ideas to upper management in the use of intangible asset leverage.

The difficulty will be in defining how something that does not have physical form can be of value and utilized as monetization. The people with power of decision will most often struggle with misunderstanding and doubt when intangibles are considered. One way to overcome these misgivings is by offering a presentation that deals with and provides a clear picture of what intangible assets are and how they can be used to increase the bottom line as a strategic asset.

By using illustration to show the best way to control , sustain and utilize the valuation of intangible assets, the walls can be broken down and dialogue can begin on the best ways to implement strategies to use intangibles.

Learn more about how the use of intangible assets and knowledge protection can be used as leverage to weather the current economic crisis.