Many consulting firms look at their intellectual property (IP) as a source of worry, almost like a liability. When you're on the final steps to win a new business and discussions move to the procurement team, your IP rights become nothing more than another contract clause to be discussed and agreed with.
When your focus is on how you can avoid a legal drama, you lose sight of how much profit you might be leaving on the table.
First, a couple of definitions here. Your IP is nothing more than your expertise documented. There are many types of intellectual property - the most well-known are copyrights, patents, trademarks, and trade secrets.
If you have created something unique to use in your engagements, that's your IP:
- A concept that allows your clients to understand a complex issue;
- New and innovative technology that does not exist elsewhere;
- Your methodology, or approach to solving your clients' problems in a consistent and predictable way.
Most boutique consulting firms do not document their IPs, and that's a problem. But even consultants that do take the time to register them, struggle to see their value to the business.
Without a clear mention of it in the consulting agreement, you are presumed to own all of the IP rights you develop, even when a company is paying for the work. To secure ownership of those rights, your clients should ensure that you sign an agreement requiring the assignment of any IP created for the hiring company.
Over time, your consulting business will have produced a considerable amount of IP. Why not turn it into profit?
You can do that by:
- Documenting your methodology, writing all of the steps you follow;
- Provide some visuals and any other support you use (text, handouts, exercises);
- Teach people in a daily workshop how to use your methods in their consulting work.
If you are reluctant because you don't want others competing with you, you better rethink it.
You thrive by being the best at what you do. The people you train will promote their services and work with other businesses, that you wouldn't work with in the first place. And you will profit from licensing your IP and providing ongoing support.
Let's say you put one person per month in such a program. If you charge $10,000 for the training and an additional $4,000 per year to rely on your for support and questions, that's almost $170,000 in new revenue. You can also refer prospects that are a bad fit to your students, generating even more money.
Of course, you need to be picky and select only competent people to spread your methodology. But it could easily translate into recurring revenue and a new offering for your marketing engine.