One of the least understood assets you have is the intellectual property that lives in your business and mind. When we as advisors help our business owner clients not only understand, but also monetize their intellectual property we provide a great service they rarely get anywhere else.
Monetizing intellectual property does several things for you. Among them are:
It forces you to think about what makes your company unique. If a company is not unique, it only has a commodity to sell. When we help our clients understand what is unique about their company we are helping them understand how to build enterprise value within their company.
Monetizing intellectual property provides a new income stream. When we help a client monetize their intellectual capital, almost every dollar that is produced goes straight to the bottom line. This not only improves present cash flow but also provides the opportunity to help our clients get a higher multiple when it comes time for them to leave their business.
It allows our clients to think about niches they serve and how their intellectual property fits in. Understanding niche management is one of the main advantages of working with intellectual property. In many companies the knowledge of niches they service is the main value of that company. Understanding and being able to speak the language of your clients is a very real and important competitive advantage that leads to understanding your niche.
It can provide the impetus to productize processes. When our clients think about their intellectual capital in the form of a product they will often think differently about processes they’ve often taken for granted within their business. Helping our clients understand how they can convert their intellectual processes to products provides new revenue streams and ways for our clients to think about their business.
Working on intellectual capital projects is always strategic. In many businesses the business owner often gets in the way because they won’t leave the tactical world of their business. When you get them to work on intellectual capital projects you are always moving from a tactical world to a strategic one. It’s the strategic world where clients learn about value and most importantly enterprise value.
If we are to be successful helping our clients change how they see their business we must help them to not only think strategically, but also act strategically. When we do this we are putting our clients in a position to change their relationship with their business and open more options on both a business and personal level.
I’m interested in hearing any thoughts you might have on how helping clients think differently about their intellectual property has changed your practice.
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