Are you Building Goodwill in your Business?
Are you Building Goodwill in your Business?
Goodwill in accounting refers to the intangible value that a company can hold, above and beyond the pure financial value of its assets. This covers brand reputation, intellectual property, and external and internal relationships.
A business that can show its goodwill in the marketplace is worth more– intangibly and financially. When a company is up for sale, the price a buyer is willing to pay will significantly increase if the seller demonstrates this goodwill quality.
What do we mean by goodwill?
Goodwill includes the value of your business brand, loyal customers, proprietary technology, a reputation for excellent customer service, and good employee relationships. It is the amount someone is prepared to pay for your business that is above your net assets at fair value. Building goodwill in your business is good for its market value, and these aspects of your business potentially represent a competitive advantage.
Five key ways to build goodwill in your business through relationships
In a business context, building goodwill is all about developing a trusted and benevolent way to work with your stakeholders. Thereby increasing your business idea’s longevity (and value). In the long term, a business that’s part of a trusted industry network has great potential in the marketplace.
- Make goodwill one of your core values – every business needs a set of core values at its heart. With the right values in place, you can put goodwill front and center of how you operate. Be kind and thoughtful. Always be honest and upfront. Additionally, behave in a way that helps the business, but also helps your stakeholders, community, and team. Living goodwill in this way makes it second nature for everyone on the team. In turn, helping set the best possible reputation for your company.
- Nurture your customer relationships and make them feel valued – a solid customer base is one of your most significant assets. Therefore, treat these customers well and do your best to create long-term, valued relationships. The more you can do to reinforce this value, the more likely it is that customers will become proactive advocates for your brand.
- Build long-term trusted relationships with suppliers – your supply chain is the arterial system that feeds your business. So, to keep this supply chain stable and affordable, you must be professional with your suppliers. Pay them on time and negotiate fairly over prices. Be reliable with your orders and work together if there are any supply problems. Above all, treat these businesses as you would want to be treated.
- Treat your employees well and make them feel engaged – be transparent and open with your team. Keep them in the loop with planned strategies and results. Offer them great benefits and time off. Further to this, make sure they are happy, healthy, and loving their jobs – and do everything you can to create a great team spirit within the organisation.
- Be truthful and honest in all your business dealings – Sometimes, telling the truth won’t seal the deal, but it’s always better to demonstrate this goodwill and to be open and honest. Dishonesty is never the path to greatness and could break your trust with your customers, suppliers, team, or community.
Talk to us about nurturing goodwill in your business
Demonstrating goodwill in your business isn’t just one of those ‘nice-to-have’ goals on the CEO’s wishlist. It’s actually an intangible part of the value of your business.