Many executives believe that the value of their company depends mainly on their financial and material assets (accounting value). However, contrary to this common idea, most of the value of a company today lies in its immaterial assets. Your business is unique and its uniqueness is built on intangible resources that it is important to measure, protect and improve. What is an intangible asset? Why measure your intangible assets? How to increase the value of your company through intangible and network capital? How can you increase the value of your company through intangible capital and network capital? We explain it all to you.
What is an intangible asset ?
The immaterial capital of a company is made up of all its immaterial assets. Thus, these intangible and concrete resources include, among other things, know-how (skills, knowledge, process…), reputation (brand image), ; cosystème, capacity for innovation, quality of customer relations or even commitments to the environment.
What are the different types of intangible assets?
The capital can be divided into three categories:
- Structural capital : governance, know-how (process, skills, knowledge, intellectual property…), innovation capacity, internal communication, organization…
- Relational capital : assets qualifying the relations between the company and the internal and external actors à it (shareholders, partners, customers, suppliers, network capital…). This also includes relations with the company, the brand and the employer brand.
Why measure the intangible capital of a company
In the same way as financial capital, intangible capital helps a company to detect itself from the competition (ability to differentiate) and therefore contributes to its valuation. More than a simple indicator at a given moment, intangible capital makes it possible to evaluate the capacity of a company to develop in a sustainable manner, regardless of the sector of activity.
Thus, measuring a company’s intangible capital can be particularly useful when considering a sale project or a funding campaign. Indeed, as intangible resources are not easily visible in an accounting balance sheet, a complete balance sheet will help you to evaluate as accurately as possible all the resources of your company and will interest potential investors. In this respect, measuring your intangible capital is essential for a start-up.
Considering the size of your business is a good idea.
However, taking care of the valuation of intangible assets can also be justified outside the sale of the business in order to adjust the strategic plan of the business. By being aware of your intangible assets, you can measure your strengths and weaknesses in order to develop your structure in the right direction and in the right way. Finally, the knowledge of your intangible capital can be a key argument during negotiations (partners, customers, banks…).
How to value intangible capital
In order to evaluate the immaterial capital of your company, you can first use the educational tool made available by the Direction générale des entreprises (DGE) in partnership with the Observatoire de l’immatériel and Atemis : https://www.cap-immateriel.fr/. This guide highlights indicators and indices that can help you build an evidence system as a basis for assessing immaterial resources. Secondly, a pedagogical guide has been produced by the Autorité des Normes Comptables (ANC) and the DGE to accompany companies in this same goal.
Finally, if you want a more precise and personalised assessment for your company, you can call on specialised external companies (Activ’système, etc.).
Digital transformation, intangible capital and network capital
Our businesses are increasingly digital today: according to Philippe Cotelle, director of Amrae, immaterial assets account for nearly 80% of the value of digital companies.
Or, digital transformation (or digital transformation) is increasingly encouraging the development of intangible capital of companies in order to strive for a more industrial valuation of them.
Thus, the book value is today more distant from the actual value of the company than ever before. This is why focusing on its intangible capital, its network capital and everything related to it is now a key issue for a company’s development.
How to increase the value of a company’s assets
How to increase the value of one’s business through intangible assets and network capital.
&Valuing your intangible assets is the first necessary step in developing your business. Then, the increase of these assets will pass by their protection as well as by concrete actions to improve the network capital, the organization or the brand image.
How to protect your assets?
How to protect the company’s intangible capital
First of all, it is important to understand that intangible capital, in the same way as financial capital, can be depleted. The increase of one’s immaterial capital thus relies on a good protection of one’s assets. For this, there are several solutions:
- Protection with the Institut National de la Proprié Intellectuelle (INPI) : to register patents, trademarks, designs… and everything related to technological innovation ;
- Copyright for digital creation: software, websites, source codes, algorithms (manufacturing process, supply chain…), applications, databases, etc. Digital creation can be protected through a declaration on the website of the Agency for the Protection of Programs (APP).
Intangible investments to develop your business
The evaluation of your immaterial resources should highlight the strengths and weaknesses of your business. Actively acting on these is a guarantee that you will develop your business in the right way.
You will need to do this in order to ensure that your business is successful.
To do this, you will need to program and deploy the necessary resources on an ad hoc or regular basis, depending on your needs and ambitions.
A regular valuation of immaterial resources is finally part of a more global strategy of valuing immaterial capital: your decisions on each investment will have to be evaluated in order to modify the company’s strategy according to your results.
Related capital: a Linkedin strategy book to help you grow your immaterial assets
Today, the social network LinkedIn contributes doubly to your immaterial assets: in addition to strengthening your brand image, developing a LinkedIn strategy helps strengthen a company’s network capital.
This is why we are offering you today a LinkedIn strategy book to help you effectively develop your network capital, an action that is part of the digital transformation of your company.