Valuing Intangible Assets in Business Sales

Intangible assets are a crucial component of a company’s overall value, but many business owners may not fully understand how to properly assess and value these assets. Hiring a professional valuator can help ensure that these assets are accurately valued during a business sale.

When selling a business, it’s important to understand what intangible assets are and how they contribute to the overall value of the company. Intellectual property, trademarks, brands, customer lists, and non-compete agreements are all examples of intangible assets that can significantly impact a company’s value.

To properly value these assets, it’s recommended to hire a chartered business valuator with experience in your industry. These professionals can use various methods, such as calculating a multiple of EBITDA or using the excess earnings method, to determine the value of intangible assets.

Valuators can also specifically value intangible assets using methods like the relief from royalty method or the cost method. These approaches can provide a more accurate assessment of the value of these assets, especially in cases where traditional valuation methods may not be sufficient.

Overall, understanding the value of intangible assets is crucial for business owners looking to sell their company. By hiring an expert valuator and following a specific valuation process, business owners can ensure that these assets are properly valued and accounted for during a sale.