|
|
|
|
|
|
|
|
|
|
|
|
|
|
Latest news:
Brand Valuation
Buying or selling a specific assets (e.g. brand) requires a very different and focussed approach to its valuation, as opposed to a business valuation. The value derived for a brand would entirely depend on the nature its nature, economic benefit, life and transferability. For not established brands, the biggest hurdle to identifying or justifying that the brand is in existence.
For smaller brands, there are key and basic questions to bear in mind when assigning a value to a brand or and these are:
Buying or selling a specific assets (e.g. brand) requires a very different and focussed approach to its valuation, as opposed to a business valuation. The value derived for a brand would entirely depend on the nature its nature, economic benefit, life and transferability. For not established brands, the biggest hurdle to identifying or justifying that the brand is in existence.
For smaller brands, there are key and basic questions to bear in mind when assigning a value to a brand or and these are:
1) Is the brand separable form the business? Separable assets are more valuable (e.g.: property) as non-separable assets (e.g. customised lab equipment) would require further investment for integration.
2) Is there any comparable market information available? Use this to help guide your value range as a starting point. Typically a royalty rate % is applied to estimate the value in an income stream, attributable to a brand. The royalty rates are best based on comparable brands or assets in the market.
3) Apply the royalty rate (e.g. 5%) to the revenue and use a discounted cash flow method (DCF: total present value of future income) method for assessing its value.
4) What are the costs required to maintain the assets? What costs contribute to the brand which need to be deducted? How much are the running costs and would there be any further expenditure required?
5) Benefit of having the brand? Think back to why you are buying or selling the assets in the first place?
6) When you have arrived at value, step back and think, is this a fair value for the brand in question? Would I be happy to pay this amount?
The above is a basic form of questions to ask and is by no means a complete list of points or questions. Once you have considered the above, you should have a broad and general view on the value for the brand in question. Of course, the actual value would be the price at which you strike a deal but negotiation can always influence a price either way.
Larger brands are more detailed and difficult to value and there are specialists valuers who do this as a full time profession.