My breakout session at the XPX Summit 2013 is going to be a workshop where participants learn to use some simple, open source tools to identify and make real the intangible capital of companies.
Why would you want to do that? Well, what if I told you that 80% of the value of the average business in the U.S. is intangible? This is one of the biggest and most dangerous secrets in finance and exit planning today. That means that there is no record in the financials used to sell companies of the knowledge infrastructure that drives revenues, profits and value.
That means that 80% of the value of the companies owned by your exit planning clients is invisible. This invisible value can make it hard to get a fair price at exit. It can also make it hard to get a loan, develop effective partnerships and even to devise a winning strategy for the future.
How did this happen? Well, beginning with the introduction of the personal computer in the early 1980’s, companies have been spending money year after year, decade after decade to build a knowledge infrastructure. The money was spent on software, databases, process automation, employee training, network development, branding, research, development and innovation. But none of this money is tracked by accountants—it all washes through the income statement. So when it comes time to talk about all the capabilities that have been developed, there’s nothing to show for all the investment.
That’s why I spend all my time spreading the word about intangible capital. It’s this enormous and valuable resource hidden inside of every company. Better management of intangible capital can fuel better results today and build realizable value tomorrow.
Come to the Summit. Learn to be intangible capitalist. And help your clients make their intangibles real--and get paid a fair price for the value they have built.
About the Author: Mary Adams is the founder of Smarter-Companies, a marketplace of learning and consulting tools to optimize returns on the intangible capital that makes up 80% of corporate value in companies today. She is the co-author of Intangible Capital: Putting Knowledge to Work in the 21st Century Organization. Previously she spent 14 years as the founder of Trek Consulting and 14 years as a high-risk lender at Citicorp and Sanwa Business Credit.
This post is part of a series of posts that the upcoming speakers of the 2013 XPX (Exit Planning Exchange) Summit are contributing. The theme of this year’s summit is The Art and Science of Collaborative Innovation. The event will be widely attended by business owners and trusted advisors to privately-held companies which are preparing for a successful exit.
Originally posted by Mary Adams on March 20, 2013 at 4:35pm
