Goodwill is the difference between an array of intangible, but important, assets and the total purchase price of a business. It can help to attract new customers and maintain relationships with existing ones. In order to protect this valuable asset, business owners should take steps to ensure that they provide good customer service and quality products.
However, not all businesses are equal. For example, if your company is struggling financially or experiencing other difficulties then it may be time for an exit strategy like selling off the company at a discount price or restructuring in order to save on costs and keep creditors happy.
Examples of goodwill can be quite varied. Listed below are some of the more common and interesting examples:
- A strong reputation
- Name recognition
- A good location
- Proprietary designs
- Trademarks
- Copyrights
- Trade secrets
- Specialized know-how
- Existing contracts
- Skilled employees
- Customized advertising materials
- Technologically advanced equipment
- Custom-built factory
- Specialized tooling
- A loyal customer base
- Mailing list
- Supplier list
- Royalty agreements
When it comes to goodwill in the business world, it can be a little hard to define. After all, goodwill can encompass a wide and diverse array of factors.
Goodwill is an intangible asset that’s created when a company has a strong reputation in the marketplace. This reputation can be the result of many things, such as being known for high-quality products or services, having a long history of success, or having a team of talented employees.
Businesses that have strong goodwill often command a higher price tag than those without it. This is because goodwill represents a valuable asset that’s not easy to replicate. So if you’re looking to sell your business, it’s important to make sure that you’re accurately valuing the goodwill that you’ve built up over the years.