Building goodwill in your business adds to its value. And potentially gives you a competitive advantage. We’ve got 5 key-ways to improve goodwill in your business, and how this adds to the value of your company.
Goodwill in accounting refers to the intangible value that a company can hold, above and beyond the pure financial value of its assets. This covers areas like brand reputation, intellectual property, and both external and internal relationships.
A business that can show its goodwill in the marketplace is actually worth more – both intangibly and financially. When a company is up for sale, the price a buyer is willing to pay will be greatly increased if the seller can demonstrate this quality of goodwill.
What do we mean by goodwill?
Goodwill includes the value of your business’s brand, your loyal customers, proprietary technology, reputation for great customer service and good employee relationships. It is the amount someone is prepared to pay for your business that is above your net assets at fair value. Building goodwill in your business is not only good for its market value, these aspects of your business potentially also represent a competitive advantage.
Five key ways to build goodwill in your business through relationships
In a business context, building goodwill is all about developing a trusted and benevolent way to work with your stakeholders that can increase the longevity (and value) of your business idea. In the long term, a business that’s part of a trusted industry network has great potential in the marketplace.
Talk to us about nurturing goodwill in your business
Demonstrating goodwill in your business isn’t just one of those ‘nice-to-have’ goals on the CEO’s wishlist. It’s actually an intangible part of the value of your business.