Don’t ignore the most valuable things your business owns.
What can I do with my IP?
Every time you win a piece of new business, you’re already trading on IP like your reputation; but there’s so much more you can do. Plus the great thing about IP is that you can’t wear it out - the more you use it, the more it’s worth.
Here are just a few examples:
- IP can be licensed to other companies, to reach markets you can’t.
- Need investment? Every ‘angel’ will want to understand what’s special about your business and what stops other people copying you. The answer is in your IP.
- Talking of which: you can do without being ripped-off or imitated. Get your IP sorted and you’ll be able to do something about it.
- If you want to make your business more competitive, you’ll need to innovate. And whenever you innovate successfully, you add to your stock of IP.
- IP can also be used to provide security for debt finance, unlock pension funds, and be used to calculate company valuations for a host of other purposes.
Companies who look after and use their IP grow faster, create more jobs, and are worth more. Profiling and valuing your IP with Inngot is the ideal way to get to grips with what you own and find out what it’s worth.
IP: what do I need to know?
1. What does IP mean?
IP stands for Intellectual Property. It’s the term used to describe things your business owns that can’t be physically measured. In most cases, you will have created them ‘in-house’, using know-how, effort and time (otherwise known as blood, sweat and tears). Some types of IP have special protection in law, but all IP adds value to your business. If you offer anything distinctive, you will undoubtedly own IP of some sort.
2. Why should I care about IP?
To be successful and competitive, you need to make the best use of all your resources. After your staff, your IP is probably the most important and valuable asset that you have.
The only reason your accountant isn’t regularly quizzing you about your IP is because its value is seldom reflected on your balance sheet. Your books only show the cost of things you’ve bought (like machinery and computers that wear out, break down and become obsolete). But these things don’t reflect what your company is worth.
3. What things are included under IP?
In the UK, as defined in law, IP has four varieties:
- Patents (new or improved ways of solving problems) – these need to be checked and officially granted;
- Trade marks (used to protect brands) – also requiring registration;
- Designs (the outward appearance of new things) – which can be registered or not;
- Copyright (the way ideas are expressed in words, music, drawings and other forms, including software code) – which doesn’t need registration at all in the UK.
However, IP is also an umbrella term for all the other important ‘intangible assets’ (other non-measurable things) your business owns. These can include trade secrets, processes, drawings or plans; contracts, relationships and customer or supplier insights; awards, permissions or endorsements.
4. How much is my IP worth?
The answer varies for each business. However, if your company were an iceberg, the fixed assets shown on your balance sheet would be the tip of it; around three-quarters would typically be hiding underwater, in your IP.
Of this IP, the specific things you can identify and use for purposes like financing are likely to account for 30-40%. And that, you may conclude, is a lot of value otherwise going to waste.