Why your brand has cash value

Tom Welsh
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THE British public has a reputation for nostalgia, and its reaction to the failure of HMV last week showed that this isn’t limited to culture or history. Despite its problems, HMV’s brand identity gave it a valuable connection with its audience. And even if this wasn’t enough to sustain its obsolete business model, it perhaps added a year or two to its lifetime.

Interbrand, a consultancy, produces a yearly report on the world’s most valuable brands and quantifies their worth. Coca-Cola was put at $77.8bn (£48.9bn) in 2012, while JP Morgan garnered a respectable $11.5bn. Although these figures are open to debate, Interbrand’s global chief executive Jez Frampton is surely right when he calls a firm’s identity “a living business asset”.

The same is true for all small or embryonic companies. How a start-up develops its identity to appeal to an audience is arguably as important as who it hires. But while there are metrics that can assist any entrepreneur with the process of crafting an brand, much still relies on gut-feeling or instinct.

More measurable is the failure to protect that identity. The defence of intellectual property is often thought of in terms of filing a patent for a new process or invention – to stop others exploiting your unique idea. But if your business’s worth is in its identity, or in the uniqueness of the experience it offers, it’s as important to guard a name or logo.

Trademarks are defined by the Intellectual Property Office as signs which “distinguish your goods and services from those of your competitors.” There are strict rules around what can qualify as an acceptable trademark – it can’t describe your product, or suggest its quality, for example. But the application process is simple. Once registered, you can defend your company or product’s public image against attempts to subvert (or trade on the back of) your own hard work. And, if you eventually sell up, the value of your trademarks could form part of the price.

The Intellectual Property Office has the details on registering your intellectual property in all its forms. Visit www.ipo.gov.uk for further details.

Tom Welsh is business features editor at City A.M.