Tangible vs. Intangible Assets
To understand why your brand is an asset, let’s break down the difference between tangible and intangible assets:
- Tangible Assets are physical things your company owns, like equipment, cash, or buildings. These items can wear out or lose value over time.
- Intangible Assets aren’t physical, but they’re still incredibly valuable. Unlike tangible assets, their value often grows over time. Examples include your brand, patents, trademarks, and goodwill.
Consulting firm Brand Finance points out that the value of intangible assets soared from 17% of the value of the S&P 500 in 1975 to around 90% in 2022.
Your brand is one of these intangible assets. Even though you can’t touch it, your brand holds significant value that can drive your business forward.
The Hidden Value of Brand Equity
Why It Matters for Your Business
Brand equity directly affects how much your company is worth. Whether you’re looking to attract investors, merge with another company, or even sell your business, a strong brand can significantly increase your company’s value. But if you’re only focused on short-term sales, you might miss out on building this long-term asset.
Global brands, like Nike, Disney, and McDonald’s, didn’t start out huge. What they had in common was a commitment to building and protecting their brand. They understood its value and invested in it consistently.
