Intellectual property is your most important business asset and a key part of your business plan.
In today’s IP centric economy, your business plan must include a strategic focus on protecting, managing and leveraging your intellectual property to build your business value and sustain your competitive advantage.
Writing a plan requires good preparation. Before drafting your business plan, you need to find the commercial relevance of your IP assets, and the resources needed for commercializing these assets. Keep in mind your IP is more than just your products and services. It includes confidential business information such as details of production, inventions, and technical, financial and marketing know-how. Other intangible assets to consider include franchise, license and distribution agreements, publishing rights, covenants not to compete, information databases, computer systems software, marketing profile, management ability, distribution network, technical skills, etc.
Your business IP is your competitive advantage and the foundation for your success. It’s essential to clearly communicate to investors that you’re taking the necessary steps to secure all forms of your IP rights. An effective protection strategy will involve a range of IP protection options — trade secrets and confidentiality agreements, trademarks, patents, and copyright. If you outsource a part of your business activities, make sure you own the IP rights over the outsourced work and prohibit others from taking advantage or commercializing your IP without your prior agreement. Depending on the nature of the IP, if disclosed in your business plan, then make sure it’s provided under a non-disclosure agreement.
Sophisticated investors look for a sustainable competitive advantage when evaluating a business as a potential investment. Licensing others to use your IP can fuel the growth of your business. It’s the tool to leverage OPR – other people’s resources. Your business can get the benefit of your licensee’s manufacturing and distribution facilities, and/or sales and marketing efforts without having to spend the time and money to develop them on your own. You support a competitive advantage while at the same time making money by permitting others to use your IP.
Your business IP is your most important asset. It’s integral to your competitive advantage and critical to your ongoing success. No matter which business cycle you’re in (e.g., early, growth or late stage), your business plan must include a strategy for capitalizing on your intellectual property.