Understanding the value of your business can be compared to looking at a mosaic picture. You can do it two ways.
As a business owner, you may be standing back, seeing the collated image as the sum of its parts – that is, regarding your business as a single entity that generates revenue.
But look closer at the mosaic and you can make out the individual tiles: the colours, shapes and textures that group together to form an eye or the lips on a face. Applying this concept to your business means it’s important to understand the contributions each element makes to your profitability and value.
That’s why we recommend all businesses take that deeper look.
Intellectual property and its distinctive value
Our company works with businesses that are underpinned by Intellectual Property or have an IP adventure on the go. And we find it’s common for IP to have become part of a business almost by accident, or at least through serendipity.
For example, a business that started out offering services might see an opportunity to build something distinctive on their own – a product they can take to market. Initially, they regard this product as a point of difference, or a separate revenue line item. But it fast becomes the reason they get clients. And so, its value becomes even more important to the business.
When it comes time to value the business as a whole – typically to raise capital, navigate a merger or consider buy-side or sell-side strategic options – we must value each part. So first, we separate the tiles.
The IP-related revenue is assessed separately from the non-IP aspects – such as consulting, implementation and support services.
Identifying the golden tiles
As a client, you work closely with us to make this happen as we help you break down your business into logical elements. You’d be surprised how often during this process we find golden tiles – those valuable business elements that have been hidden in plain sight. These are the segments, departments or offerings that you may not have realised have tremendous potential or value, or that may be obscured in your market positioning.
This process can often be exciting and, sometimes, quite shocking for a business owner, and for the business. It’s like seeing your business in an entirely new light. But it helps you understand where your true value is coming from, not discounting any part of your business with a single-valuation approach.
Getting the strategy right
Once we all share this new perspective, we often work with clients on a “Strategic Option Analysis” project. We help you define some strategic options. Then, we create a range of goals for your business’s growth or future. We test and value these options together, using market analysis and feedback to refine what’s best for you.
We can also give you the benefit of our decades of experience, identifying the key drivers or levers that can accelerate your value, and make it easier to focus on your goals.
Of course, we can also help you align your marketing spend for the best return, and package your business in a way that makes it most attractive to your clients, customers or potential buyers.
And if you are planning to sell your business, we can help you find the perfect buyer – that buyer who sees the golden tiles in your mosaic and is prepared to pay a premium for the value within.