Getting your business "Sale ready" Creating opportunity - Part 2

Making your business sale ready is all about creating opportunity. Opportunity attracts investors and the greater the perception of opportunity the higher the level of interest. Maximising your business’s intangible assets is the best way to achieve this.

Let’s look at three examples:

1. Facebook, currently the ultimate sale ready business. Share offers over the past year point to a USD50b increase in value. Why is the value going up so fast? It’s because investors see unlimited potential for growth generated by Facebook’s intangible assets. These include brand value, goodwill, a leverageable online business model and a steadily increasing customer base.

2. Les Mills, established by Olympic discus thrower Les Mills in 1968. Les Mills was just a gym till Les’s entrepreneurial son Philip took over in 1993. Philip had identified potential intangible assets in fitness programmes and maximised these by trademarking, copyright protecting and licensing them. And, most importantly, he invested heavily in the Les Mills brand. Securing these intangible assets gave this family business the platform and opportunity for investment and international expansion. There are now more than 13,000 Les Mills licensees worldwide.

3. Frucor. Originally an Apple and Pear Marketing Board subsidiary, Frucor sold fruit juice and fizzy drinks. Believing that its little-known “V” energy drink formula had untapped potential, private investors bought Frucor in 1997. They switched the focus to maximising and leveraging “V” and sold the business in 2002 for NZD294m. By 2008 “V” was valued at NZD800m and was generating 75% of Frucor’s total revenues.

Each of these businesses has a long-term focus on creating and securing intangible assets. This strategy has made them attractive to investors from a very early stage.

Maximising intangibles by protecting them makes sense even if you don’t want to grow your business. The inexorable movement towards online business and transfer of business information in digital form exposes unprepared businesses to new global threats. Trade mark infringement, intellectual property theft, fraud and criminal activity are becoming rife. No business owner can avoid to overlook the risks of the digital age.

So how do you begin? The first step is to establish your business growth critical path, i.e. the most efficient series of steps toward achieving towards your business goals. You can think of it as building your business’s “yellow brick road” to sale readiness. As all good road-builders know, a road needs sound foundations. There are 10 major foundations to every business growth critical path, each of which contains significant legal and intangible elements.