Valuing databases is something Intangible Business does for a number of purposes, including for management, sale, due diligence and for disputes. Our approach to valuing databases follows accepted industry database valuation standards. Each database valuation approach requires an in-depth understanding of the issues involved in valuing a database. Such issues include:
- Size, quality and content of the database
- Segmentation of data and value to customers, whether brokers or end users
- Database accuracy, decay rates, verification process and costs of maintenance
- Ease of operation and dependence on people, reputation or brand name
- Market dynamics, positioning and reputation within the specific industry
As each database, and the business model to which it is applied, is unique, Intangible Business tailors its valuation approach for each database, providing a bespoke database valuation each time. The three main approaches to valuing a database are:
Income approach to valuing databases: analysing income by product/customer and market segment, appreciating the relative strength of the database against benchmarked competitors. These future cash flows are then converted to a single present amount.
Cost approach to valuing databases: the cost approach to valuing databases is likely to be relevant as the cost, time and risks involved in building a comparable database are a relevant reference point in most circumstances. This is generally an important component of database valuations.
Market approach to valuation databases: the market approach to valuing databases is based on research on comparable transactions in the public domain, either for standalone businesses or licensing deals.
Intangible Business is experienced in operating databases, creating databases and valuing databases both large and small in a number of different industries including retail, fan clubs, memberships, telecoms, professional services, travel and automotive.