Are there any non-tangibles that could impact the value of a business?
I was just curious.
Absolutely. Customer service is an intangible that very positively affects businesses.
A couple of years ago a small chain of grocery stores in our area was bought by a larger chain. Customers of our neighborhood store of the small chain made such a fuss about not wanting any change in employees and customer service, that the larger company agreed and didn't change any of the services.
Sure.
Such as the ash cloud from the Iceland volcano
grounding all air-traffic to and from Europe, thus affecting the concert tour of my son next week.
Yes, there are several intangible factors that can impact the value of a business. Some examples include:
1. Brand reputation: A strong brand reputation can increase the perceived value of a business. This includes factors such as brand recognition, customer loyalty, and positive associations with the brand.
2. Intellectual property: Patents, trademarks, copyrights, and trade secrets can be valuable assets for a business. They can provide a competitive advantage and generate future revenue.
3. Customer relationships: A loyal customer base and strong relationships with customers can contribute to a business's value. Customer retention rates, satisfaction levels, and the overall customer experience can impact the perceived value of a business.
4. Employee skills and expertise: The knowledge, skills, and expertise possessed by employees can be a significant asset for a business. Highly skilled employees can contribute to innovation, productivity, and a competitive advantage.
5. Contracts and agreements: Long-term contracts with suppliers, customers, or partners can add value to a business. These contracts can provide a stable revenue stream and potentially secure future business opportunities.
To determine the impact of these intangible factors on a business's value, various valuation methods can be used, such as the income approach, market approach, or cost approach. These methods consider both tangible and intangible assets to assess the overall worth of a business.