If a potential investor looked at your company today, what value would you place on the company? How would the investor value the company? These are both interesting questions to ask yourself and ones that you need to have answers for to be ready.
Hint: An article in The New York Times describes how Lenovo valued two relatively new acquisitions, Motorola’s smartphone and IBM servers:
“Lenovo Group Ltd said it booked intangible assets as about 50 percent of the $5.2 billion dollars spent on its Motorola Mobility smartphone and IBM Corp low-end server acquisitions.”
The point, of course, is not about being acquired. Rather, it’s about the value of intangible assets.
- Every business, from startups to established enterprises, has a range of what’s called intangible assets, the ones you can’t identify as easily as, say, equipment or buildings.
- The key to understanding the value of your company—its real bottom line—is to identify and protect all the company assets, tangible or intangible.
Making your intangible assets work for your business involves two steps: identifying what they are, and protecting them.
Step 1: Identifying your intangible assets
Here’s an eye-popping notion: It may be the case that most of your company’s value is embedded in its intangible assets. That is particularly true for startups and young businesses. Yes, this is a case of what you don’t (yet) know may cost you.
Begin the process of identifying all your assets by asking yourself these questions:
- What do I and/or my company offer that customers could not find elsewhere?
- Is how I offer my product or service unique?
- Aside from the product itself, have I developed software or written materials that are unique?
- Do I personally have a reputation in my area of expertise? True, you may not be Warren Buffet or Steve Jobs, but you may have established a valuable reputation in your geographical area and/or in your area of expertise.
- Have I established a business name? A brand?
- Do I have lists of customers or potential customers?
Now that you have asked yourself these questions, consider the potential business consequences if any of these assets should disappear. That’s why protecting them is critical to your company’s success and sustainability.
ID your IP®, our self-guided questionnaire, has many of these questions (and more!) and keeps all your answers in one place. Need to test drive things first? Use our free Business Risk Assessment.
Step 2: Protecting those intangibles
The digital, global economy has made asset theft quick and hard to detect. Prevention is the best protection.
Sustainable control over intangible assets not only avoids their theft, but also avoids costly legal battles, disputes with colleagues and/or contractors over ownership of intangibles, misuse of your data, loss of reputation, or damage to your brand.
Take heart: protection is available in the forms of establishing proprietary knowledge through “trade secrets,” as well as copyright, patent, and trademark laws.
You may be more familiar with copyright, patent, and trademark protection through registration. More information about them is available on our blog. Protection of trade secrets offers you a competitive advantage as long as you reasonably protect them from being stolen. We recommend you meet with your attorney to obtain legal advice.
However, consider taking these precautions for trade secret protection:
- Protect your online activities from cyber theft by insisting on a complex password system that colleagues and contractors cannot share with each other or externally.
- Institute non-compete agreements with colleagues and/or partners.
- Treat company data as confidential and instill that mindset into all work relationships.
Turn to Traklight for simplified, affordable small business asset protection to ensure the true value of your bottom line. Contact us to explore our free online tools, review all your assets, or simply inquire about how we can assist you.