Intangible Assets

The basics of intangible assets are described in this article with examples relating to how they relate to your business’s financial health.

Intangible assets are not physical assets. They are not assets you can see or touch, like money. They are not easy to put a value or price on, but intangible assets are valuable parts of overall financial health.

Trademarks, copyrights, patents, and business methodologies are all examples of intangible assets for a business. These things are not physical and legal action can be tricky to act on. Another example is plagiarism, the stealing of words and ideas. How do you copyright your ideas? It is hard to do, but your ideas, brands, and words are the most critical aspects of your business and life. They make up who you are and how others see your business.

Brand-name recognition is a good example of the value of intangible assets. Starbucks would not be the same if it were not called that name and marketed as the coffee place with their specific atmosphere. The brand-name and the business methodologies that surround the business make up who that company is and what it offers to the customers. Without this, it would just be another coffee shop.

The powerful search engine Google offers its own valuable intangible assets. There are dozens of great search engines, but Google rules over them all. Why is this? It is because they have valuable intangible assets. Learn from the masterminds at Google and create not just a recognizable brand name, but an entire philosophy of business. Your goal is to stand out from the crowd and offer something new to the table. Google is simple, easy to use, and effective. Your business should also be those things and have intangible assets to emulate and communicate these qualities that every business should strive for.

Another type of intangible assets is intellectual capital. Let’s say there are two Mexican food restaurants with equal strengths and weaknesses. Both have a large customer base and are pretty successful. However, one business employs mostly Mexican people who grew up making their favorite foods. The other trains high school students to copy recipes gathered from a general cookbook. Which one is more valuable? The restaurant that has real Mexican food made by people who know what they are doing is more valuable. They have intellectual capital that the other restaurant can’t copy or imitate. If you were to visit both of these restaurants, you would know which one you are going to visit again.

There you have it, a basic overview of intangible assets. If you need more information on this or other topics, please click the link below.