You might have already read our blog on how to build a scalable business and how strategically examining your product, packaging, and distribution can open up the potential for growth. Now we have a concept that aligns with this; intellectual property (IP).
The Intellectual Property in your company will be entirely different from your product. Instead, when we talk about IP we’re talking about the fundamental knowledge, skills, expertise, relationships, and resources. These are all the key assets that support your position on the market and, without them, your product wouldn’t exist.
To put it very simply, your IP is the rocket fuel of your business. If you’re ready to grow, this is what’s going to get you off the ground!
What Does Intellectual Property Mean in Business Terms?
Your intellectual property is your company’s know-how. It’s the unique assets you have behind your product that allow your brand to stand on its own two feet and drive growth. Your entire reputation is built around your IP making it a crucial aspect of your business.
Let’s look at an example of a company’s Intellectual Property to get a clearer idea of what this all means.
McDonald’s is an undeniable household name and a company that sells burgers and other fast food products. But what’s their IP? They’re not known for their burgers – no more than any other fast-food restaurant – so what are they doing so well?
In the case of McDonald’s, it’s franchising. They have a brilliant franchising model that they’re able to earn a lot of money from, increasing their equity value and making them such a profitable company.
If you take a burger restaurant that does just as well as McDonald’s in terms of popularity, but they haven’t franchised, they’re going to be worth a fraction of McDonald’s value.
McDonald’s is a great example of how profitability is about more than just the product. It’s about commercialising the IP of your brand and making real money there.
What Benefits Does Clear IP Bring to a Business?
We’ve looked at how a clear IP can help build profits, but what more can it do? Let’s take a look at another example to see how IP can be used to get over major business hurdles and drive growth.
In the scenario, a company experienced in asbestos removal is trying to sell their business. At the time, the market is declining, margins are under pressure due to competitors bringing in foreign subcontractors, and a recession has hit the economy hard. The owners want to sell the business but it’s not exactly an ideal time.
Alongside this, the company isn’t in the best position to sell. It’s set up in a classic one product, one distribution model (P1/D1) and relies on the business owner to run it. That means that the first valuation they receive is much lower than they want, leaving them stuck between a rock and a hard place.
So, they start to look at their IP. Rather than selling the business by highlighting that it’s an asbestos removal company, they look at what they could do around that service.
In the end, they find that this includes a whole range of points, like the ability to remove hazardous waste, a model that complies with European and UK regulations, and a watertight recruitment process to hire top talent. They also have strong relationships with local government and agencies, which puts them in a great position to secure long-term contracts.
Already, they can put forward a more valuable proposal and up their valuation, leaving them much happier at the prospect of selling even in an unstable market.
But, they can still go one step further and start using their IP to develop new products.
How Can You Use Your IP to Develop New Products?
There’s a super simple way to start moving from P1 to P2, P3, P4 and beyond, and it all starts with your Intellectual Property.
Once you’ve identified your IP and made a list of all your unique selling points (like in the example above) review it as though you don’t know what the company sells. Look at your IP and take guesses at what the product could be. The ideas you come up with are your ideas for new products.
It’s such an easy task to do and makes the challenge of knowing which products to develop a piece of cake! Give it a go and see what your business should be selling.
Your Intellectual Property Can Give You Clarity
When you have a clear understanding of your IP, the rest of your business falls together. You clarify what helps you stand out from competitors and why people want to spend their money with you. Your IP is your USP, and knowing that is essential in business.
You can then start to drive innovation and profitable growth, taking your company to the next level. If you’re looking to sell your business, you’ll also see an increase in your equity valuation.
Of course, your Intellectual Property isn’t the be-all and end-all of a successful brand. That asbestos company wouldn’t be able to solve all of their problems by repackaging their proposal with a clear IP. But understanding what sets them apart will allow them to move away from the service that was holding them back and start to expand their company.
Where they were once stuck, they now have a whole host of opportunities to leverage right in front of them.
By finding your IP, you give your business the best chance of flourishing and positioning yourself exactly where you want to be in the market.
If all of this sounds wonderful, but you don’t know where to start, contact our expert growth coach team today. We can help you grow your business for the future, create quick growth to sell your business, and work with you to identify the direction you should be moving in.