HOW TO VALUE GOODWILL IN A BUSINESS

Many businesses have suffered the economic uncertainty around the globe which leads to the fall of many business organisations, but few businesses tends to stand tall because of their long term standing goodwill. Some of us might ask, what is Goodwill? Is the value of commercial advantage inwhich a business generate over it competitors. It is the value of an asset owned that is intangible but has the prudent value in the life of a business inwhich it exibit the value of the business on what it standing for. Follow this rules of making goodwill in your business.

BUILDING A STRONG GOODWILL IN A BUSINESS.

Goodwill is the foundation that has been set out into building up the business, the relationship between a business and its customers. For a business to set up goodwill there must be a qualitative service and trust which the businees will give to it customers.

Goodwill has a great deal in the part of running a business, the tangible stuff is easy to buy but goodwill can't be bought, you build it up like a house on a solid foundation or even its just like a plant it grows depending on how you water and nurture the (customer) plant. Goodwill is the real value of the business, making more sales or profit in the business is not generated by the equipments, inventory and fixtures in a business. Goodwill makes a difference between a business being worth $200,000 and a similar business being worth $400,000.

Goodwill is like an intimate relationship between a male and a female, when they are bond there is this trust that both of them will pose on each other and when they gain that trust the relationship will be doubt free and they will be so close to each other, no matter what rumour being said about any of them, they move on for the sake of (goodwill) the trust between them.

Goodwill is the neccesity you need to grow in your business that will bring more customers and laso retain your old customers you've been doing business with. You acquire goodwill in your business through your quality product/services, trust and the relationship between the business and the customers. Many customers will come back to you if you've provided them good customer service and have build up a good relationship with them. Your business will keep on enjoying profit amongst your business competitors if you maintain a longstanding goodwill.

FACTORS LEADING TO GOODWILL.

1.INTERGRITY OF OWNERS. A good business management must be honest to their customers and their employees being active in the business as one body, co-operative and having strong moral principles that cannot be bent by any of the customers. Ignoring insults from customers and having a high tolerance of the different kinds of characters you meet in the business world. As a business man or woman you have to be sincere with your customers, avoid sentiments in your business, first come, first serve. As this leads to goodwill.

2.QUALITY OF MANAGEMENT AND EMPLOYEES. A good business must have a good managerial services that cordinates or control the whole business with qualified employees who are ready to give out their best in running the business.

3.QUALITY OF PRODUCT. The quality of product/services rendered to customers will make the business strong and firm. When you give out the best quality product/services to your customers they will patronise you because you know what they need and you satisfy their wants. And no matter how inflation might tends to increase the price of your product/services your customers will always come and do business with you because of the qualitative product/services you rendered to them. Your quality product/services leads to goodwill in the business.

4.LOCATION OF BUSINESS. For a business to enjoy goodwill it must be located where commercial activities takes place. For example if a business is been located in a rural or local area it will not be recognised by many customers lest few, but if you set out your business in a commercial area surrounded by competitors with similar business and you are still giving out the best quality product/services of your business. Customers will always locate you no matter how far or near your business is located.

KNOWING THE FACTS OF GOODWILL IN A BUSINESS. Goodwill is all about the nature of the business and the intergrity and ethics with which you conduct your business. The understanding between your customers and your employees and you, also contribute to the business. Goodwill considered good as a loyalty that is impossible to imitate unless it is sold. Investors are attracted to business that have goodwill. The goodwill of your business is equivalent to cash flows. If you want to sell your business out, the foundation you've laid for the goodwill of your business will attract many potential buyers. You will be able to sell your business for a very good amount.