Most small-business owners don't understand all of the valuable assets their business has beyond the cash in the bank. They don't realize the array of assets they control that have a value beyond what they do for their own business.
Forget computers and other office equipment, which typically loses value as soon as you buy it. Here are 15 assets your business may own that could increase the value of your business, or at least provide you with additional income.
: The list of past and current customers can have value. This list is only valuable if the business is scrubbing it every six months. I once acquired a business with a list of a 1,000 past and current clients. When we marketed to this group, we found that only 20% of the list was good.
: Most people know that names like
have tremendous value, but respected local names have as much value. Many of us are familiar with local restaurants, regional breweries and service firms whose names are as highly regarded as national firms.
In Panama, there is a restaurant called Napoli's that serves hundreds of people six nights a week. It is the most well known and respected Italian restaurant in the country. Anyone who buys it and keeps up the quality has bought a license to print money.
: A unique process for developing a product or delivering a service has tremendous value. Think of Google's process for delivering ads to its Web site. If you want to think smaller, there is a company in Pennsylvania called New Pig with a process for putting kitty litter in a stocking to absorb oil spills.
: The understanding and unique skills of a business' employees are an asset, especially in a professional service business. One of my clients developed a 25-person business that markets products and services for pharmaceutical companies. All of his employees had worked in marketing for major pharmaceutical companies. When he decided to sell the business, four of the 10 largest advertising firms in the world offered to buy his company at a substantial premium over the normal sales multiple that most marketing firms sell for.
: The property you own may have multiple values ranging from location to zoning rights. A local manufacturer in my hometown had an old building that turned out to be a good location for a supermarket.
: A client had signed a long-term lease that had allowed him to sublease his space if he so chose. His business was on a respirator, and he didn't have the energy or interest to fix it and no one showed an interest in buying it. Because the lease still had another five years to run, he had to keep the business alive just to pay the rent. The demographics of the region were changing as more upscale businesses were moving into his area. One day, a site location specialist from the local economic development organization asked him if he had any interest in selling his lease. He subleased his space at a substantial profit and was able to sell off his business.
: Everyone knows the value of patents, but some companies get patents for products or processes but never find a use for them. But someone else may find a use for them. I once did work for GE Investments and I remember the GE people telling me that the inventor of the Slinky worked for GE.
GE didn't know what to do with the spring their researcher invented so they allowed him to buy it for $600. You've probably owned at least one Slinky in your life, so you know that that patent was worth billions, not the hundreds that the investor bought it for.
: A client of mine has a trademark that a major company wants to own. It turns out that the trademark may be worth more than my client's entire business.
Web site addresses
: A client bought hundreds of Web sites that would attract individuals looking for a mortgage. As the mortgage market declined, so did his business. One day, one of the biggest mortgage banks in the country came in and offered him millions of dollars for all of his domain names. My client knows that the mortgage business is cyclical, but the amount offered was enough for him to retire.
: When most people think of research, they think of pharmaceuticals, electronics or other forms of technology. Yet there is a value to other types of research, like market research, which includes demographics; and competitive or economic research. In my own business, I have written more than 150 business plans, and I have a treasure trove of interesting information that a buyer of my business would find valuable under the right circumstances.
: I once ran a trade association where we gave awards to technology companies. The award was only meant to be regional, but a national accounting firm thought that if it could win that award, it could develop a higher profile and build more substantive relationships all over the country.
: A mascot has tremendous value. When people look at a duck, they may very well think of the Aflac duck. That duck has become very coveted by insurance brokers and their clients all over the U.S.
: The land you could be sitting on may have valuable mineral rights. A baseball player bought his grandmother's old farm to help her pay for living in a retirement home. One day, he found rock on his land that appeared to go very deep. He had a geologist come to tell what type of rock and how to remove it. The geologist told him the rock was a type of slate that -- based on his estimation of the depth and size of the rock -- was worth billions of dollars.
: Many businesses own buildings where signs reach a lot of people. The best of these are corner buildings, where the company puts its sign on the front and can sell the side to another building for advertising revenue.
: Because cities and towns are interested in Wi-Fi service, providers of such services are looking for rooftop access. A client who provides Internet access signed a long-term deal to put his antennas on the roof of a newspaper building. That roof went from being a nesting place for birds to producing monthly income.
Take the time to inventory your business' assets -- there may be hidden gems that could increase the value of your business.
Kramer is the author of five business books on topics related to venture capital, management and consulting. He is a faculty member at the Wharton School of Business at the University of Pennsylvania and the veteran of over 20 startups and four turnarounds.