A "brand" is much more than a name. What makes it unique is that it provides purchasers with both the tangible and intangible benefits of owning a product. At their best, brands can be extraordinarily powerful, capable of motivating buying behavior and capturing a premium price for goods and services. It is because of this that brand valuation has become increasingly important. Companies now buy and sell brands like any other physical asset, and they are managed meticulously to ensure that brand value is not eroded. AccuVal helps companies understand the underlying worth of these intangible assets through accurate and well-researched brand valuations that enable our clients to make better informed decisions.
There are numerous reasons to conduct formal brand valuations. A company may request the information to assist it in making decisions regarding whether to license or sell the brand. If it decides to license, the appraisal can be used to set the basis of the licensing agreement to calculate adequate profit be made on the transaction. Brand valuations can also be leveraged to obtain additional financing, for financial reporting, in tax management and for business planning purposes.
At the onset of the brand valuation, AccuVal first examines a full history of the brand and how the goodwill developed over time has impacted sales and profit margins in an effort to quantify the premiums garnered from the brand's recognition. We also request market share and name recognition studies so that the brand's position in the marketplace can be considered in the analysis. Along with this, competitive threats are examined and the longevity of the brand is estimated. We also examine which aspects of the brand are registered with any patent and trademark offices. This legal protection can enhance brand values. Finally, our brand name valuations encompass a review of historical margins in various geographies. Certain brands are much stronger or weaker in particular global markets due to local competition, differing tastes and differing styles. Therefore, a company's marketing and branding strategy has to be analyzed regionally to estimate its continued opportunity for financial success in each market.
In determining brand values, AccuVal seeks out the most relevant and current market information to ensure the accuracy of its analysis. Our access to detailed transaction information regarding similar brands in the marketplace provides market value benchmarks to support the overall analysis. We also conduct detailed research regarding royalty income generated from the licensing of comparable brands. This information is analyzed in brand name valuations to decide the most likely royalty percentage that the subject brand could obtain in the marketplace today, if licensed, thereby isolating value to the asset.
While pinpointing brand value is very difficult, a thoughtful brand valuation report conducted by an independent appraisal company experienced in intangible asset appraisals can be extremely valuable.
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An appraisal can be leveraged to address many business challenges: