Intangible Capitals make up roughly 80% of a business’s value. Without understanding the strengths and weaknesses of the intangible capital of your business, you run the risk of leaving value on the table during your business exit.
Exit Planning Institute® (EPI) Chairman, Christopher Snider, shares, “Managing intellectual knowledge has become the single most important task of business. Today, wealth is created by your ability to create, assemble, integrate, protect, and exploit knowledge assets.”
EPI released a comprehensive look at the Four Intangible Capitals, consisting of an in-depth whitepaper, owner exit case study, and descriptive infographic. We recommend these resources be utilized by advisors in client engagements, shared with your network of advisors and owners, and incorporated into your content strategy.
What are the 4 Intangible Capitals?
Human Capital
Human Capital is the measure of the strength of your people, talent, ability to execute, ability to choose and prioritize, ability to adapt and innovate, energy and passion, personal character, grit and intelligence, and the ability to deploy these independently of the business owner.
Customer Capital
Customer Capital measures the strength of your relationships throughout your supply chain. The primary driver of customer capital is the relationships with your best customers: deep, integrated, open communication, shared goals, and benefits.
Structural Capital
Structural Capital represents the strength of your strategy, systems, processes, capital, and financial structure. How well are these documented and proven, and are they scalable and transferable?
Social Capital
Social Capital is the strength of your culture. Human, Customer, and Structural Capitals are blended and optimized by Social Capital to create a flow and rhythm that self-perpetuates, drives, and elevates your company to best-in-class.
Check Out More EPI Content
How Intangible Capitals Make or Break a Business: The Impact of the Four Intangible Capitals on Business Value
EPI interviewed a variety of experts to determine how these Intangible Capitals can be strengthened to improve business value. Explore the benefits of strong Intangible Capital, how to improve your Capital, and the negative impact of poor Intangible Capital strength.
The Four Intangible Capitals Infographic
This graphic displays the Four Intangible Capitals in every owner’s business. This infographic highlights the key attributes of each Intangible Capital and provides advisors and owners with a checklist for building value across every facet of their business.
Christopher Snider says, “Although most owners intuitively are aware of the importance of these assets, most do not formally measure them. When optimized, these assets create accelerated increases in business value and owner independence.”
How Improving the Four Intangible Capitals Can Build Value In Your Business Case Study
Dan Paxton, Founder of ExitSmarts, Inc. and a former Certified Exit Planning Advisor (CEPA®), shared the story of one of his client engagements dealing with weaknesses in the business’s intangible capital.
In this case study, Dan walks through the path toward building transferable value in a business that is entirely dependent on the owner.
View More Exit Planning Content
Exit Planning Institute shares new research and content about various trending exit planning topics on a quarterly basis. This content provides advisors and owners with a deep-dive look at value acceleration, the four intangible capitals in every business, and personal planning considerations.
Through whitepapers, case studies, and infographics, you can advance your education around these important topics and stay up to date with industry trends.
Explore our Exit Planning Content Library here.
About the Exit Planning Institute
The Exit Planning Institute® (EPI) is the exit planning market leader, providing education, tools, resources, and the ecosystem to support professional advisors across the globe on all things Value Acceleration. EPI’s offerings include the Certified Exit Planning Advisor credential, the annual Exit Planning Summit, EPI Academy, an extensive Chapter Network, and more.
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