What does intellectual property have to do with the value of your business? And how do you increase it without increasing turnover? Find out as I dive into this topic and impart valuable knowledge about intellectual property and the crucial things that you need to know especially if you’re growing your business or preparing for exit.
Topics Discussed in this Episode:
- The way to increase the value of your business
- Intangible assets as intellectual capital
- The factors that affect company valuations
- Examples of sales that haven’t depended on turnover (Facebook’s acquisition of Instagram and WhatsApp)
- Why you need to secure your IP sooner rather than later
- Example of how a business’ online dimension can lead to a huge valuation (Ctrip’s purchase of Skyscanner)
- The difference between intellectual property and intellectual capital
- Focusing on turnover is not necessarily the way to increase the multiple that your business might achieve on exit.
- Contrary to popular belief, the traditional methods of valuing a business that is used by accountants are not always the yardstick by which your business will be valued.
- Synergies within businesses can result in a valuation which is far higher than the company turnover or traditional methods of valuation that you might believe the company is worth.
- We’re living at a time when any company, even a small business, could increase its value by focusing on its intellectual capital.
- The four categories of intellectual capital:
- The human capital
- The customer capital
- The structural capital
- The social capital
- 70% of businesses are in the knowledge services sector, so knowledge is the most valuable asset of a business and managing the intellectual assets has become a business’ most important task.
- The brand is the most important asset of your business to develop.
- How the business interacts with customers is more important than what it sells.
- Pay attention to the various components of your business’ intellectual capital.
- Plan your exit strategy very carefully. Start by getting the nuts and bolts of your business sorted, i.e. your intellectual property.
- Secure your IP protection sooner rather than later.
- Use intellectual property to increase your valuation and build your brand.
- Get the right people on your team before you start down the path of your growth.
- Create deep, long-lasting relationships with your customers.
“As the web and technology become more and more important in our lives, it means that intellectual property is a critical area to upskill yourself in so that you can be sure to take the basic steps that you need to take on an ongoing basis, to ensure that your assets are secured.”
“If you’re looking for ways to improve your business value, consider developing your systems and processes rather than just focusing on increasing sales and other revenue-generating activities.”
Thank you for listening!
If you haven’t already taken the time to fully understand IP, I highly recommend that you sign up to the Legally Branded Academy Course. It’s not expensive and it’s a business course suitable for a worldwide audience.
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Resources mentioned in this episode:
Links to my books and online courses:
- Legally Branded Academy Course
- Legally Branded Annual
More from Shireen Smith: