If you are a start-up business, chances are you are classed as a microbusiness – which is defined as companies with 10 employees or less and a turnover of £632,000 a year.
If you are busy working all the hours to get going, looking at your intellectual property might be last on your list to do. But if you are asking yourself ‘do I need IP if I’m a microbusiness?’ the answer is a resounding “YES”, says intellectual property expert Gemma Ryan.
Gemma is part of the Crucible team of business experts here to help you make the most of your business, looking at how you can protect your ideas by looking after your IP, and open up new ways of making money.
Here’s the top five reasons why IP can help you as a start-up:
- Make extra money
If you are the owner of a Trade Mark, Design, Patent or Copyright you can license it to third parties to use – creating extra revenue for you. For example, videos, films, sound recordings, images, logos, software and inventions, can be licensed under a contract between you and someone else. In fact, you are probably a licensee of IP yourself, if you have an Adobe account, Hootsuite and Canva then you are! Licensing means that while someone else can use your products and services, the IP ownership remains with you. It can be a valuable source of revenue for you as an entrepreneur and some businesses are keen to license IP to save having to create new products or services themselves.
- Build Brand Recognition
Developing your own Trade Marks and creating a brand identity means that customers can recognise and trust your products and services. This may be your brand name, your logo, tagline, colours, designs, style of photography and messaging that you use to communicate what you do and what your business is. You can register Trade Marks and Designs to obtain registered protection but you will automatically have some unregistered rights, such as copyright in any suitable works created, for example, sound recordings, films, broadcasts and original artistic, musical, dramatic and literary works. Before you settle on your brand it’s important that you do some due diligence to check what others are using and have registered before finalising icons, names or other elements. You can search for registered rights using the Intellectual Property websites search facility.
Both registered and unregistered rights can prevent someone from copying you. However, registered IP rights are often easier to enforce against copycats. Registered rights can also give you credibility in the marketplace too. Registered Trade Marks are a badge of origin which conveys messages about your business, brand and reputation, allowing customers to find you and trust you so having a distinctive trade mark is very valuable to your business.
- Attract Investment
Angel investors, venture capitalists and banks all look at the IP owned by a company when considering investing. In fact, 90% of the value of all companies listing their stock on the Stock Market comes from the IP rights. Start-ups owning Patents and Trade Mark rights were 10 times more successful in securing seed funding rather than other start-ups that had not secured registered IP. Having registered IP rights is a sign to potential partners that the business has a clear focus and strategy; that it shows uniqueness and exclusivity and – in the worst case scenarios – can contribute to the exit strategy in selling the IP rights to operating companies.
For a microbusiness, having robust IP protection in place is not just a legal formality but a strategic necessity. It enhances your competitive edge, enables revenue generation, attracts investment, mitigates risks, and encourages continuous innovation. By securing your intellectual property, you lay a strong foundation for sustainable growth and long-term success, ensuring that your unique ideas and brand are safeguarded and can thrive in the market.