The document discusses the importance of goodwill for businesses. Goodwill refers to the value of a business based on positive attributes like good employees, customer relationships, and brand reputation. It is an intangible asset that helps businesses survive economic downturns by retaining existing customers and attracting new opportunities through business networks and referrals. The document outlines ways for businesses to build goodwill, such as maintaining high quality products/services, developing rapport and integrity with customers, committing to the brand, providing good customer service, and participating in community initiatives. Goodwill takes time to develop but is important for gaining customers, investors, opportunities, and higher sale value if the business is sold.

1. How important is Goodwill in a Business?
Posted on March 15, 2012 by Maya Pillai
“Goodwill is the one and only asset that competition cannot undersell or destroy.” – Marshall
Field (American Businessman, 1834- 1906)
The economy is slowly coming out of the slump and every business, irrespective of its size,
experienced a downturn. One of the reasons many businesses survived the economic uncertainty
is because of their longstanding goodwill. So what is “Goodwill” all about? It is an intangible
asset for any business because it exhibits the value of the business and what it stands for; such as
good employees, client relationships, brand name and its community work.
Goodwill is for Business what Reputation is for a Person
You can say that goodwill is an emotion that exists within us and when you create an emotional
bond with the people, you deal with; you are rewarded with opportunity, business networks,
endorsements and trust. Here is a list of points to support the importance of business goodwill.
Building goodwill with customers. Goodwill is important to increase your customer base but also
retain your old clients. This happens through word-of-mouth publicity and recommendations.
Many customers return to you if you’ve provided them good customer service and have
established a good relationship with them.
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2. Investors are attracted to businesses that have goodwill. The goodwill of your firm is equivalent
to solid cash. It will help you obtain loans from banks with ease knowing that you are a valued
customer.
New avenues open up; opportunities are created through business networks if you have
longstanding business goodwill.
Another advantage of goodwill is that, even if you make a blunder, your customers are willing to
forgive you when you apologize. This is because of the trust they have in your business from
previous experiences.
When you want to sell your business at any point in time, your reputation and the goodwill of
your business will attract many potential buyers. You will be able to sell your business for a good
amount.
How to Build Business Goodwill
Goodwill is something that cannot be bought but has to be earned; there is no way to earn it
overnight. It will take considerable time and effort to develop goodwill in for a business. We
have listed some factors that aids in developing goodwill in business.
Maintain the quality of your products or services – Remember that the first impression is the
best impression. If your business provides quality products/services right from the beginning, you
are taking the steps towards developing goodwill.
Rapport building and integrity – People will find dealing with your business easier when you
take pleasure in servicing them and when you provide business integrity.
Brand commitment -Your business should be one step ahead of your competitors. A business
under the limelight for the right reasons will attract goodwill for itself.
© 2012 Apptivo Inc. All rights reserved

3. Service satisfaction – A customer is likely to return to you and also recommend your
services/products if he is happy with his experience.
Community service not only helps in developing business good will but also leads to small
business longetivity - As your business grows, you should focus on investing in community
goodwill. Some suggestions could be, making a small donation to community functions or by
giving a helping hand to those start-ups of a different industry that are struggling. You can also
promote amateur artisans and musicians by holding exhibitions or concerts for them. Local
residents would be willing to buy tickets that are fairly priced. You should include other small
businesses to help with local events. It will pay-off with long-term sales growth and business
referrals.
Goodwill is all about the nature of the business and the integrity and ethics with which you
conduct your business. The understanding between your customers and you, your employees and
you also contribute to the business goodwill. Consider goodwill as an honor that is impossible to
imitate.
Flickr image by jm3
© 2012 Apptivo Inc. All rights reserved