World Entrepreneurs’ Day 2022: common pitfalls to avoid
With World Entrepreneurs’ Day 2022 on the horizon, Mathys & Squire wants to share some common pitfalls that innovative early-stage businesses may fall foul of.
In an attempt to raise awareness of them, and to help business owners prevent making easy mistakes, we have collated a list of seven tips on what not to do, especially as a small and medium-sized enterprise (SME). As much as advice on starting a business can be helpful, guidance on what not to do can be equally (if not more) essential.
The early stages of growing a business can often be the most challenging and complex for entrepreneurs. Navigating a new market is a difficult challenge alone, however, one of the most overwhelming and confusing aspects to some is intellectual property (IP). Based on our years of experience working with entrepreneurs and SMEs, we are able to shed some light on the world of IP.
Exploring too many concepts
What sets entrepreneurs apart is an abundance of creative, groundbreaking ideas. These are then laboured over and boiled down to one essential ingenious idea that provides the foundation to the start of their business. A common mistake amongst entrepreneurs is pursuing multiple inventions and business ideas at the same time to increase chances of success. Some ideas require all commitment and capacity available to be fruitful, so whilst working various ventures at the same time may work for some, it may be easier to focus on one invention at a time.
Fully disclosing your ideas
Market research is an obviously essential part of the due diligence process prior to any business formation. Understanding your market and its audience can determine your success, but there is a thin line between research and full disclosure. The only way to keep an invention secret is to not disclose any details to anyone until the patent has been granted. If there is a need to share the specifics of your idea with someone, make sure you have a non-disclosure or confidentiality agreement in place.
Neglecting your cash flow
Within business startups, it often takes more capital and resources to get up and running than could ever be predicted. To complicate things further, entrepreneurs often don’t see any form of return on their investment from their business for a long time. Getting to grips with and keeping on top of your cash flow is essential to keeping the new business afloat. In regards to IP, filing costs can be pre-agreed with your patent attorney, whilst all renewal fees are charged at the same time every year, which makes budgeting a lot easier and helps avoid any cash shortages.
Disregarding the value of your IP
Whilst startups and SMEs may struggle with cash flow in the early stages of their business, there is value to be found within their IP. Owning IP discourages competitors from utilising your invention or brand, as you have the right to take legal action against any infringers. At the same time, your business becomes more attractive to investors who feel secure in the knowledge that you have a strong and stable position within the market. Your IP can also open multiple doors further down the line and bring in more capital, whether that may be through licensing, franchising or selling.
Overlooking elements of your brand that could be protected
Multiple elements of your brand should be considered when shielding your business from infringers. You can register your business’s name and logo, but also even a slogan or a sound. Owning IP rights is the only long-term way to protect your brand from being replicated by someone else.
Taking your eye off your competitors
Your competitors will consistently be attempting to take your customers away from you. By keeping an eye on their steps and strategy, you can always stay one step ahead of them.
Ignoring your competitors’ IP portfolios
Any application or already granted patents are available to the public. In order to anticipate your competitors’ strategy, you have to monitor their portfolio of intangible assets. With this in mind, you can position your offering to adapt to that or to introduce new products and services to remain competitive and make sure your business remains a more attractive option to investors.
Written by: Andrew White