Brand valuation is a hot topic these days, and it isn’t only relevant to large companies. Your intangible assets, like your brands and their underlying intellectual property can be more valuable than your tangible assets. Your intellectual property lawyers help you to protect your brand legally. At Brand Finance we help our clients to maximize the value of their brands.
You might ask yourself the following questions:
How do you value IP?
Brand Finance uses one or more of three widely recognized approaches to valuing IP depending on the circumstances of the particular assignment. The three approaches are :
COST – How much investment would be required to create similar IP?
MARKET – What has identical IP recently been sold for?
INCOME – What cash flows does the IP generate?
All three methodologies are compliant with both IVCS and ISO Standards. Most commonly we apply the Income Approach, which estimates the value of future income attributable to the brand and expresses this as a Net Present Value. Within the income approach the most common method used is the Royalty Rate Relief method because it is transparent, based on commercial practice and more verifiable for audit and legal purposes
Why would I want to value my brand?
If your business depends on its brand(s) to generate sales you should be thinking about brand valuation. At Brand Finance we are entirely focused on quantifying and leveraging intangible asset value. Valuations can help you understand which intangible assets you have which are being underused. We help you extract the maximum value from your brands.
What can Brand Finance value?
- Trade marks, brands
- Customer Lifetime Value
- Patent/ R&D/Technology
We also carry out Branded Business Valuations (BBV)
This is the value of the entire business operating under a particular set of trade marks and associated intellectual property. BBVs give a greater understanding of the business value as a whole and as a starting point for more precise valuations on individual intangible assets including brands.
Would licensing or franchising help grow my business? How do I negotiate the best deal?
If you are thinking of licensing your intellectual property or franchising your business then knowledge is power. It’s not about getting to the “right answer” but rather being armed with everything required for effective negotiation.
If you know what value the trade marks add to your business, and you also know the maximum potential value that they could add to the other side, then you have the beginnings of a negotiation range.
Any final deal is likely to come out somewhere in the middle. Effective negotiation is about ensuring that you frame the discussion correctly, so you finish out at the top of the range not the bottom.
Which deal stands out in my mind?
We worked with the owners of a small historic shopping precinct. We appointed IP lawyers for them who managed to register the name as a trade mark in numerous classes – not easy where addresses are concerned. When the property was sold two years later our valuations of the IP added $25 million to the price.
©Brand Finance 2013. Version 5.4.2013.
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The matters set out here are not intended to be a definitive analysis of legislation or professional advice. You should take legal advice before any course of action is pursued.