Time to re-value your visual properties?
Most conversations around ‘visual property’, if you were engaging with a design practice would probably encompass visual themes or perhaps questions of ownership or copyright.
If you were to ask an accountant about the the same, you probably wouldn’t expect to find the inspiration you were searching for, or to help you make important decisions about how to present your business.
But before jumping to a conclusion about which view might be worth listening to, let’s look a bit more carefully at the question. The question about ‘value’. Because the accountant’s approach might give you greater insight into decisions you’d usually trust to a designer.
Let’s look at the question from another angle.
Have you ever considered the value of your business’ identity, not simply in terms of recognition, trust and repeat custom – but in monetary terms?
We know how important brands, household names, are recognised on the balance sheets of very large organisations but what about your company’s identity?
How would go about measuring and then improving that? How would that knowledge affect decisions you might make – or trust others to – in considering new marketing activities, a re-alignment or re-positioning of what you do through your identity or other intellectual marketing properties?
The intellectual property (or IP) of a business is an asset that can be easy to overlook. But with IP assets including trademarks, designs, copyrights, brands and company reputation there’s often a great deal more at stake in making changes.
Think about this. “Under legislation laid out in the Finance Act 2004, directors are able to use their own company’s intellectual property to access extra cash”.
Indeed, specialists can help small and medium-sized business owners use these assets to access funding through their pension schemes. Adam Tavener, Chairman of Clifton Asset Management says “Almost all businesses have IP but most are simply not aware of it. We help directors to identify, articulate and monetise the intellectual property assets they have.”
Now of course any financial advice comes with the usual caveats and “businesses need to be aware of the risks associated with that kind of investment”.
Danny Cox of Hargreaves Lansdown reiterates this point, that “if a pension scheme is investing in intellectual property, it has to be done on the basis that the value of that asset is going to rise.”
In other words, it has to be a good investment.
If you’re about to embark on any review of your business’ visual properties, don’t fall into the trap of just attributing product quality, styling, service and reliability to your identity’s value – it’s real worth is ultimately in (hopefully) driving up your pricing power. And so the value of intellectual property and long-term, your business.
Identity design has long suffered as being an intangible art, and at the hands of insufferable ‘artists’.
There’s art there, no doubt, and capturing the ideals in an idea requires some nimble thinking. Good design however, isn’t intangible. Good accountants know (and are recognised by HM Revenue & Customs for it) that intangible assets can be measured as well as any other. Of course, there’s always some degree of creativity required in interpreting the results but nonetheless it is perfectly possible to place a sum on goodwill and make a return from it.
So making time to invest in your future, by looking at what more your visual properties could deliver, might just deliver some surprising results.
Especially with an agency using ‘inspiration’ and ‘accountant‘ in the same sentence.
Here’s an extract from an accountants perspective as a primer for those not versed in balance sheets.
“The valuation theory starts from the basis that there is an acceptable rate of return for the owner or investor in any business, which is determined largely by the amount of risk undertaken.
Having identified the annual percentage return required on the investment in the business, the accountant would then identify the future maintainable level of post-tax profits which the business can sustain. This is easier said than done, and can often involve adjustments to historic results to reflect uncommercial elements in the business.
Let us say that the required return in a particular business is computed to be 20%, and the maintainable post-tax profit is £100,000. The implication of these figures is that the total net assets of the business are £100,000 / 20% = £500,000. If the tangible net assets (buildings, machinery, vehicles, stock, debtors, cash less amounts owing to creditors) are £300,000, it is assumed that the value of intangible assets represents the balance of £200,000.”
Image – Serge Bloch. See more of his great work here.