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Newsletter - October 2025

The Power of Intangible Assets

The above graph shows the intangible assets as a percentage of the total value of listings sold by Tabak over each of the last 18 years – and the average level of intangibles is 66% of the sale price. The median over these 18 years of data is 64% with both numbers very similar.

Why are the intangibles so high? Quite simply, when you buy a business, you are buying a profitable cashflow, and quite rightly there is a cost to that. The stock and plant are a part of the TCO (Total Cost of Ownership) and the balancing figure is intangibles.

It can be very hard to specifically nail down an intangible value in isolation, as much depends on the level of assets in the business, and multiples/ROI considerations for that industry, location, economic situation etc.

It is also true that businesses with a higher value of stock & plant, generally have a lesser % of value captured by intangibles.

So, what are intangible assets – and how do they contribute to this positive cashflow?

Intellectual Property

• Logo’s, branding, patents, copyright etc.
• Website, social media activity & databases
• Systems & Processes

Rights

• Contracts & Agreements (customer and supplier)
• Franchises & Licenses
• Employee & Contractor Agreements
• Service contracts & distribution agreements, both formal AND informal               

Relationships

• Distributor
• Customer
• Staff
• Government

The above summary is by no means exhaustive, but every business sold by Tabak will have a level of intangible assets, which drive the top line sales and in turn lead to bottom line profit.

So, the next time you hear someone say there is no such thing as goodwill – let them know that business goodwill/intangibles value is alive and well and in many cases will be higher than the tangible assets and stock of the business you are buying.

Damien Fahey; Partner
Tabak Business Sales, Tauranga