Strategic Intangible Assets For SME’s

Michael D. Moberly   August 17, 2009

The rise in knowledgw intensive – dependant companies has, as most recognize, elevated the importance and relevance of intangible assets.  The ACCA (Association of Chartered Certified Accountants) identifies three facts – perspectives that are especially relevant to recognizing ‘intangible assets as strategic assets for SME’s’ . 

First, for many SME (small, medium enterprise) management teams’, intangible assets remain somewhat obscure, and unfortunately, shrouded in (technical, financial oriented) jargon.  Second, a very significant percentage of SME’s (perhaps 80+%) are in the service sector, which typically generate income from their intangible assets.  Third, intangible assets routinely form the basis for SME uniqueness and competitive advantage.

Intangible assets are not the exclusive domain of large, multi-national, IP intensive Fortune 500 types of companies however.  Intangible assets are pervasive; they exist in companies of all shapes, sizes, and industry sectors.  But, in order for the intangibles to be fully utilized, regardless of whether its an SME or Fortune 500 firm, there must be dedicated and knowledgable individuals amongst the management team who both recognize and provide the necessary stewardship, oversight, and management of those assets as strategic assets! 

This means a company’s intangibles should be identified, assessed, protected, and purposely developed, managed, and positioned (aligned) as integral components to a company’s (master) strategic action plan.  In most strategic plans in which intangible assets have been integrated – aligned with a company’s mission and/or core business, the plan itself, has been designed to achieve specific goals with respect to the utilization of intangible assets, i.e., they are being developed to (a.) become sources of revenue, (b.) build (company) value and sustainability, and (c.) serve as potential foundations and/or platforms for future growth and expansion.

Of course, there are multiple other benefits that accrue to management teams (and their companies) when they move away from the conventional (historical) view of treating intangible assets as merely individual pieces or collections of assets that are not integrated into an overall strategic plan.  CFO’s, for example, have long recognized the importance of strategically managing a company’s financial assets.  Thus the concept itself, is not particularly new.  What is new however, is recognizing that intangibles are strategic assets for SME’s!