Why are Brand’s Intangible Assets?

In this blog, we will discuss the benefit of thinking of your brand as an intangible asset.

Although your brand is not a physical item, it holds a huge value for your business. Investing in your brand is important because it will pay off in the long run through future profits.

If you don’t think of your brand as an asset, your branding will only support short-term sales. Unless sales were made immediately, a branding campaign would not be seen as a success. This expectation is unrealistic because branding is a long-term investment. Selling will become easier over time as your brand becomes more known and recognised.

There are two types of assets: Tangible and Intangible. Tangible assets are physical objects in possession of the company. They can decrease in value through continued use or damage. 

Examples of Tangible assets include:

• Equipment
• Machinery
• Cash
• Buildings

Intangible assets are nonphysical but still hold monetary value to the company. It can be hard to assess the value of intangible assets as they often increase over time. 

Examples of Intangible assets include:

• Your brand
• People
• Goodwill
• Patents
• Trademarks

Brand equity is the value of a brand as a whole. Because your brand is an asset, it can be sold. In order to sell your brand, you need to give it a monetary value (brand equity). 

Positive brand equity is when a brand is recognisable enough for customers to be willing to pay extra for its products than they would for generic brands. Negative brand equity is when customers are not willing to pay more for a brand name version of a product. Investing in quality branding and marketing can contribute towards your company having positive brand equity.

To conclude, brand’s are intangible assets because they hold a monetary value to the company. Many small companies make the mistake of not viewing their brand as an asset. Whereas, larger more successful companies treat their brand as something valuable and important. You should always question whether business decisions will increase the value of the brand. 

Do you need help growing your brand? Get in touch with us today to discuss how we can help you.