Last month we talked a lot about small business branding, and how creating a strong brand can add a great deal of value to your business in the long run. But what do we mean when we talk about “brand value”?
Brand value is a term that comes up a lot for companies with shareholders, because positive brand value can do a lot to convince people to invest in a business. It also comes up when talking about the buying and selling of companies when determining an appropriate price.
Consider Instagram, a startup that sold to Facebook in 2012 for 1 billion dollars, despite the fact that it is a service that exists on the internet and was run by just a few people. Sure, Facebook was buying the app’s technology, but Facebook has an army of developers that could easily have built similar photo sharing apps in a few days. So why the $1 billion price tag? Facebook was buying the brand that Instagram had spent two years building – very, very well.
Simply put, if all of a hypothetical company’s assets put together are worth $1 million, and it is purchased for $10 million, then you could say that the company’s brand is worth $9 million. With that in mind, have a look at the brand values of the top 5 most influential brands in the infographic below, created by Infographdesign.com (via Infographic Journal).
So if you are on the fence about whether or not it’s worth your time to invest in brand building for your small business, consider the numbers below. They are not the net worth of companies like Coca-Cola and Apple, they’re the value of the brand alone.