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Thought Leadership

What value does your business bring to your customers? And what makes your business stand out from others? 

It is possible that 80% of your company’s value falls within the four intangible capitals, otherwise known as the 4 Cs. 

The four Intangible Capitals are Human, Social, Customer, and Structural Capital. 

Learning more about the 4 Cs can help you build value within your business.

#1: Human Capital

The Human Capital of your business can sometimes be the hardest to manage, because it’s the most important. People are everything. 

Exit Planning Institute President Scott Snider says, “I don’t care how good your product or processes are, if you don’t have the right people – you’re screwed.” 

Human Capital is the measure of talent on your team. Many business owners admit that finding and retaining top talent is a major challenge. To make things easier, you can follow a series of steps when working on your employee development plans. These will help you encourage growth in both your employees and your business. 

  • Recruit
    • Think about why talented people would want to work for you. Is your business attractive to those looking for a job? Can you articulate your core values to the people you’re recruiting? Which characteristics do you most value in an employee?
  • Motivate
    • Most people want more than just a job, they want to feel like they are a part of something. Inspire your team with the right incentive programs to keep them feeling motivated. 
  • Retain
    • If you have incredible talent in your company, but have a high rate of turnover, you’re losing valuable people. Make sure you provide a path for professional growth, as well as retention incentive for your top employees.
  • Evolve
    • Businesses grow when teams evolve. Try promoting talent from within your organization. This way your leadership team will grow as your business changes.

#2: Social Capital 

Another term for Social Capital is company culture. It embraces the people, and is the heartbeat of the organization. 

Key components of a company’s culture include how they communicate, what they believe in, and how they operate both internally and externally. 

Culture can bring people together. It represents your brand, your team, and how you interact with your customers. Social Capital can be hard to figure out as a new business owner. When you’re working on your exit plan, consider whether or not your culture fits the organization acquiring you. 

#3: Customer Capital

Customers are what bring business. Moving customers from a state of engagement to entanglement can be a challenge. It’s important to figure out what your business does so well that your customers will consider you indispensable. 

By building value in your business, you’ll effectively strengthen your Customer Capital. Try to think of your business through your customers’ eyes. This will help you address their needs. 

#4: Structural Capital 

The strongest of all the intangible capitals is Structural Capital, which includes everything that allows your company to work efficiently. This may include the process, training programs, technology, tools, equipment, and real estate. 

With structural capital comes a success that’s not dependent on any single person’s ability to perform a specific job. This ensures relationships are transferrable. 

The 4 Cs help business owners with their exit planning strategies. When they evaluate the 4 Cs on a daily, quarterly, and annual basis, it results in happier people, more profits, and higher valuations.

When it comes time to move into the next phase of life, exit planning can help harvest your business for the next phase. It creates a significant company.  

Looking for assistance in planning your exit strategy? Feel free to contact our team!