Does Your Business Have Intellectual Property?
Most small businesses with profit under $500,000 get valued using an adjusted maintainable earnings approach for a single owner-operator. But there’s often a layer of “hidden value” sitting in plain sight: intellectual property (IP).
What Counts As Intellectual Property?
Intellectual property covers any original creation of the mind — inventions, artistic or literary works, designs, and symbols used in trade. It’s a genuine competitive asset, and it can be legally protected through patents, trademarks, copyrights and trade secrets.
Patents
Protect new, useful and non-obvious inventions, giving the owner the right to stop others making, using or selling it for a set period.
Trademarks
Cover the names, logos, symbols and slogans that set your goods or services apart — registration gives you exclusive rights to the mark.
Copyrights
Protect original creative works like books, music and artwork, giving the creator exclusive rights to reproduce, distribute and display them.
Trade Secrets
Confidential know-how — formulas, processes, customer lists — that gives a business an edge, protected through confidentiality agreements and access controls.
How Do You Protect Your IP?
- 1
Identify exactly what IP your business holds — patents, trademarks, copyrights or trade secrets.
- 2
Register it with the right body, such as IP Australia (or overseas, the US Patent and Trademark Office or US Copyright Office). This is general information only — always get advice from an IP attorney on your specific situation.
- 3
Run regular audits of your IP portfolio to keep registrations current and accurate.
- 4
Make sure your team understands why IP matters and what part they play in protecting it.
- 5
Lock down trade secrets with restricted access and non-disclosure agreements for staff and vendors.
- 6
Keep an eye on your industry and competitors for possible infringement.
- 7
Act quickly on any infringement — cease and desist letters or legal action where it’s warranted.
- 8
Bring in an IP attorney or specialist to help manage and protect what you’ve built.
- 9
Build a proper IP strategy that lines up with your wider business goals.
How Much Is IP Actually Worth?
IP genuinely differentiates a business from its competitors, and it can become a real revenue stream through licensing or franchising — think about how much of a franchise fee is really just paying for the right to use the brand. A patent-protected design that gives a genuine point of difference can lift profitability, and with it, the value of the business.
That said, plenty of business owners decide a patent isn’t worth the cost unless the design is truly unique, often preferring to reinvest in R&D and stay ahead rather than defend a patent. In most small businesses, IP ends up folded into the overall goodwill value rather than being valued as its own line item.
Think your business might have IP worth protecting or valuing? Talk to a qualified IP attorney about it — and if you’re not sure who to call, get in touch and I can point you in the right direction.
