Top four ways to add value to your business
Whether you are looking to sell your business, bring on partners or investors, apply for a business loan or plan for transition, you need to have a good understanding of what your business is worth. This is often referred to by experts as a business valuation.
A lot goes into a business valuation, but in high-level terms, the business valuation includes both tangible assets (e.g., buildings, equipment, inventory) and intangible assets. Let's explore intangible assets and how you can add more value to your business simply by identifying some intangible assets and taking steps to protect those assets for your business.
1. Your "Secret Sauce." Every business has a secret sauce, whether it is something as seemingly simple as a list (best customers or vendors that give you an edge), or the secret recipe that people drive from miles around to buy at your store. Let's face it, without your secret sauce there may not be much that differentiates your business from the competition.
Whatever your secret sauce is, make sure to identify and protect it. You will likely find that your business has more than one “secret sauce.” If you lost any of those to a competitor, the future of your business might be in jeopardy. So once you know what makes your business special, be sure to protect it. The great part is that trade secret protection is free. There is no government registration required to protect a trade secret. All you need to do is take affirmative steps to keep it secret.
2. Your Expressions. Every business has expressions that are unique: your website, newsletter, manuals that explain to your employees how to provide a consistent, positive experience for your customers. Often, these have taken a lot of time, effort, and money to develop.
While often overlooked, these expressions may be subject to copyright protection. Simply taking the time to identify these assets can add value to your business. And while the copyright law provides automatic protection as soon as an expression is reduced to tangible form, copyright registration is one of the least expensive forms of intellectual property protection and provides additional legal benefits.
3. Your Brand. Perhaps the most important asset of any business is its brand. Every business has a name and perhaps even a logo that you use to market products or services. You may even have a tagline. The point is, people recognize your products or services in a crowded marketplace. Now don't get me wrong, your brand is much more than just the name or logo. Your brand includes all of the goodwill that goes along with that name or logo. And that's what makes it valuable.
Think about some of the famous brands you see every day. Everyone recognizes these brands, and expect a certain experience whether walking into a store selling that brand at the airport on the other side of the country, or a store down the street. Often, the brand has evolved into much more than simply a name that identifies a product. The brand is an experience.
And that's the case for many businesses. Even a handyman provides customers with an experience – showing up in a clearly marked vehicle, wearing a clean uniform with name badge, being courteous and professional while explaining the problem and the solution. The handyman’s business may thrive or fail based on whether the professional image is conveyed to every customer.
So take some time and identify your brand and what it means to offer products or services under that brand. And then protect the name or logo that represents your brand. Don't let anyone else trade off of the good will you've spent so much time, money and effort building. And while you may have certain legal rights to your name or logo when used as a trademark, registering a trademark with the state and federal government can provide additional benefits.
4. Your Innovations. Some businesses have innovations, some businesses exist to innovate, and other businesses have no innovations at all. That’s okay. If your business has an innovation, sit down with a patent attorney and map out a strategy to protect it. But remember, not all innovations will make you rich.