There are a lot of ways to boost your revenue. Take a hard look at some of your idle or seldom used assets when conducting business growth planning.
You are probably so busy with your normal work duties that you might be overlooking untapped potential all over your company.
At first glance, this “potential” might not seem like much. Maybe it appears in the form of an old, discarded service proposal, a “not-quite-ready-for-primetime” product design, or even in the skills of a veteran employee that you’ve started to take for granted.
But any of these could represent valuable forms of intellectual capital — a mostly untapped resource in companies in nearly every industry.
Business growth planning: a new take on “value”
Consider the way public companies are valued. Back in the 1970s, about 80% of a public company’s value was tied to its tangible assets such as equipment, machinery, buildings, and inventory. Only 20% of a company’s value could be traced to the worth of its intangible assets.
Thirty years later, that ratio is almost completely reversed. Intangible assets make up the lion’s share of a company’s value.
What is an intangible asset?
An intangible asset – an asset you can’t necessarily see, touch, or feel – is easy to spot, once you know what you’re looking for.
Typically, an intangible asset includes:
- Your company’s brand name, product names, and reputation
- Your company’s intellectual property, including work processes, inventions, patents, trademarks, trade secrets, and copyrights
- Human capital, which means the experience, skills, reputations, and creativity of your employees
Experts say they can make up about 80% of your company’s value.
First, this is not to say that tangible assets aren’t important. Certainly they are, in many industries.
Second, granted there are many ways to put a value on a company, but most of those methods (net present value of cash flows, etc.) can ultimately be tied to a company’s effective use of intangible assets.
Finding the potential in an intangible asset
If your resources – money, time, personnel, etc. – allow it, you can introduce an idle idea or neglected concept into your current service or product line. But there are other ways to generate revenue from intangibles, too.
If your company has no current use for the idea, it can be licensed to another firm that can implement it right away. The right licensing deal can be very lucrative. Ask Bill Gates.
If you don’t have the resources to introduce the service or product yourself, consider marketing it with a strategic partnership.
You could start a new business unit or division to tap its potential.
You might be able to donate the idea to some other entity or charitable institution in order to take a tax write-off. Ask your tax adviser for guidance.
The bottom line of intangibles in your business growth planning
If the investment community puts a very high value on intangible assets, then maybe you should, too. And you should definitely make an effort to tap the potential of those you’re not using.
Discover more creative methods of business growth at MP Star Financial:
- Creative Ways to Grow Your Business: Online Advertising
- Creative Ways to Grow Your Business: Job Sharing
- Creative Ways to Grow Your Business: Make Yourself an Expert
If cash flow problems are preventing your company from pursuing its growth potential, invoice factoring might be the solution you need. MP Star Financial can help. Call for more information about invoice factoring today. (800) 833-3765, extension 150.