I encourage my listeners to think about the intellectual property assets they are accumulating in their expertise-based services businesses so that they can scale their business to the next level. In this episode of Hourly to Exit, I encourage you to treat your assets like any other inventory through accumulation, tracking, and protection. While the legal definition of inventory envisions tangible objects, in an increasingly digital world, it’s important to expand your understanding of what IP you have created or licensed in your business. In this episode, I discuss:

• The typical stages of an expertise-based business, and the associated IP inventory
• How employees, contractors, and vendors are integral to identifying and developing your IP
• Best practices for taking care of your IP inventory at each stage of development
• BONUS – I review the reasons a non-compete is non-compatible with inventory accumulation

This solo episode is full of useful information and frames IP in a way that helps listeners to capitalize on their hard work. Whatever stage of your business, you have IP to nurture and preserve. If you aren’t sure where to start with this critical work, contact me to consult about developing and protecting your IP.

Resources Mentioned:

• Intellectual Property Inventory

Connect with Erin to learn how to use intellectual property to increase your income and impact. hourlytoexit.com/podcast.

Erin's LinkedIn Page: https://www.linkedin.com/in/erinaustin/

Think Beyond IP YouTube Page: https://www.youtube.com/channel/UCVztXnDYnZ83oIb-EGX9IGA/videos

Music credit: Yes She Can by Tiny Music

A Team Dklutr production

Hello, ladies.

Welcome to this solo episode

of the Hourly to Exit Podcast,

where I ask and answer,

does your expertise based

business have inventory?

Per Investopedia inventory

refers to a company's

goods or products that are

ready to sell, along with

the raw materials that

are used to produce them.

Inventory can be categorized

in three different ways.

Raw materials work in

progress and finished goods.

So now let's look at

the typical stages

of development for an

expertise-based business.

Most of us start by providing

one-on-one services in

our chosen field, which

is usually the area of

our prior employment.

Many of us are ex-corporate,

so maybe you're marketing

or finance it or legal.

during this initial stage, we

develop our expertise through.

Obviously our firsthand

experience that we brought

from us from employment.

From that, we may have some

original ideas about the way

things could be done better.

Maybe that was the impetus

behind going out on our own.

As we get clients, the type

of work that they request from

us will learn something new

with every client engagement

that will add their expertise.

Many of us will get

certifications or additional

training, and depending on

your field, you also may need

to do continuing education.

We may do research, either

primary or secondary when we

find holes in our knowledge

or we need something to

support, one of our theories.

And occasionally we will

need to use a subcontractor

who has an area of expertise

that we don't have.

And so those subcontractor

deliverables will

also be something that

feeds our expertise.

Now, what I would call these,

Elements during the initial

stage of developing our

expertise based business.

I call them raw materials.

They're all the pieces, the

nuts and the bolts and the

screws and the things that

we bring together, that

will form our expertise.

Now as our expertise matures,

we will develop internal

resources so that we can

predictably and efficiently

deliver the results

that our clients value.

At this point, we've been

servicing our clients

we figured out what they

want and how the best way

to deliver it to them.

And so at this point we start

creating some infrastructure.

To deliver those one-on-one

services more predictively

and efficiently, and therefore

more profitably, of course.

So those include systems

and processes and SOPs,

templates, frameworks,

and methodologies.

And I'm even gonna put

employees and contractors in

this category, even though

it's a little bit kind of to

the left, but basically, call

these the work in progress

stage where we have taken

all the raw materials from

that initial kind of building

our expertise stage, we've

figured out, the best way to

serve our clients, and now

we're starting to put the.

Scaffolding in place

for to serve them.

and then I add the, employees

and contractors in there

because they are the extension

of building these structures

that helps you, serve your

one-on-one clients, when you

have these kinds of systems in

place and frameworks in place

and templates so that they can

also serve your clients, and

provide those same results.

So that's the work

in progress stage.

Now, eventually we hit a

revenue ceiling or an impact

ceiling because there's

only so many, clients we can

serve on a one-on-one basis.

so we start looking for ways

to increase our revenue or

increase our without just

putting in more hours.

So we know what that means.

We need to, figure out a

way to decouple our income

or to decouple our in.

Packed from ours.

And so we start looking

for resources that tell us

how to scale, how to add

leverage to our business.

And probably we are

either hiring a business

coach or we are following

a business coach.

You know, we're listening

to their podcast, we're

reading their books.

but in any case, however

you engage the same.

advice is that you need

to turn your expertise

into intellectual property

so you can create new

scalable revenue streams.

So these are things like

programs and courses and

books, maybe even software.

I do put productized

services in this one.

Templates that are now

being sold as opposed

to use internally.

And, licensing when you

have any of these things

above that third parties

wanna use as well.

So these I call finished

products cuz they are the

things that you are literally

selling that is not your

time, but they are things

that are separate from you

that you'll be selling.

So those are your

finished products.

we have raw materials.

We have work in progress

and we have finished goods,

and these occur throughout

the development of our

expertise-based business.

And what is each and

every one of them?

Intellectual property.

So just because you don't

have a stockroom filled

with shelves of physical

materials, that doesn't mean

that you don't have inventory.

You do have inventory.

Now, of course, this

is not the, accounting

definition of inventory.

this is not the

cost of good solds.

It's gonna go onto your

financial statements.

But the common sense,

notion of inventory,

where you have the.

Inputs, the raw materials,

the structures that you put

in place to help, yourself to

create those finished goods.

And so you need to take

the same care with your

inventory that a car

manufacturer does with its

parts or that a retail store

takes with its merchandise.

So with your intellectual

property inventory, you need

to be thinking about the

creation, the development.

Protection and of

course the monetization

of your IP inventory.

And so now we're gonna just

go back over those stages

of inventory and talk about

the best way to manage it.

In the context of intellectual

property and these stages

apply whether that IP is owned

by you or licensed to you.

So first, raw materials.

at this stage of development,

it is most mostly about making

sure that you are using and

understanding contracts cuz

it's contracts that govern

the creation ownership.

Assignment and

licensing of rights.

With respect to copyrights.

So at the raw material

stage, it's all about the

contracts, with the exception

of your original ideas.

So when you have original

idea, first we're making

sure that we are creating

copyrightable materials by

putting them in tangible form.

Of course, they have to

be original and have some

element of creativity,

although that's a.

Fairly low bar.

when you are putting your

ideas, expressing them in

tangible form, their original

ideas, you are immediately

creating, copyright

ownership in that, element

that you create in that

material that you create.

And it does not

require registration.

We'll talk about registration

later, but at the raw

material stage, it is just

important to make sure that

you are putting your original

ideas into tangible form.

Then the client work.

So here, I'm sure your

clients are gonna request

agreements, so now it's

important for you to make

sure you understand those

agreements that you're reading

them and that you understand.

Who owns the deliverables.

Now, sometimes you're

creating something completely

original for a client.

maybe you're doing something

very creative, like,

creating a new logo for them.

But if you're doing something

that is based on your original

ideas, they're coming to

you because you know how

to, train, workplaces to

have a better culture.

So you have your own

ideas around that.

You wanna make sure that those

client agreements reflect

the fact that some of those

deliverables are your original

materials and that you will

retain ownership in them.

when we are going out and

getting certifications

or trainings or

continuing, education.

That is a circumstance of you

borrowing or being licensed

the right to use someone

else's intellectual property.

Here it's important.

Again, it's a contract.

A license is a contract.

We need to understand

the limits of your rights

to use those materials.

typically you will have the

right to use, know, anything

you get in a certification

program or training

program, you can use them

And providing one-on-one

services to your clients.

But what you can't do

typically is sublicense those

materials to somebody else.

You can't create a training

program that you're selling

to somebody else using

the materials that you got

from a training program or

certification program, right?

So we need to make sure

that we understand the

limits of our licenses,

and that is about

understanding the contract.

When we're doing research,

whether you're using AI or

other sources, make sure that

you are tracking the third

party materials that you are

incorporating into your work.

Now here, if you are using

AI or if you are using

other sources, you need to

make sure that, you are.

not infringing

anyone's rights.

AI in particular.

I mean, I'll

confess that chat.

G B T is the one that

I'm familiar with.

They don't provide attribution

for what they provide to

you, so you will need to use

other sources like Grammarly

to make sure that you aren't

infringing anyone's rights

if you are, using research,

depending on how you're using

it, if you're not transforming

it anyway, if you're just,

maybe you're taking someone's.

pie charts or someone's,

you survey results and

you're incorporating

them into your work.

if this is something

that are going to be,

selling, you should have

permission to do that.

so that's important

to know there.

then your subcontractor.

Deliverables always,

always did I say, always

use a written agreement

with subcontractors.

That is the only way to ensure

that you own the deliverables.

In the absence of a written

contract, the subcontractor,

the human being who created

the deliverables, owns

the copyrights in it.

So you need to have that

written agreement so that

you own those deliverables.

And the other thing that

you get with your written

agreement is that you

can make sure you put in

there a requirement or

a warranty, that those

deliverables are original.

You don't want

your subcontractor

delivering, some ai.

Crapola, right?

So you wanna make sure

that you have clarification

about the nature of

those deliverables so

you can depend upon them.

And if your subcontractor is

using their own preexisting

materials, again, like

they have some area of

expertise that you don't

have, and so they're using,

their own foundational

materials to help you then.

They, of course, are going to

want to reserve rights in that

preexisting material, but you

need to make sure that the

rights that you do get the

license that you get to use

your preexisting material is

sufficient for your purposes.

Let's say you do need

to use it with your

clients, then you will

need a right to sublicense

it, to your clients.

Or maybe you need to

use it more than once,

whatever it may be.

You need to make sure that you

have the rights that you need.

In the deliverables from your

subcontractors if you're not

going to own them outright.

All right, so that was

the, raw material stage.

Now, the work in progress

stage that is really pretty

much about positioning.

So it's less about,

contracts, but more about

how you are becoming the

go-to person in your space.

So you've.

Figured out the way that

your clients like to be

served, what the best

results are, the best way

to create those results.

And you're building that

infrastructure, the systems,

the SOPs, the templates, the

frameworks, methodologies.

And so at this point you

are focusing on getting

those nailed, right?

So.

there are some

circumstances where you

can copyright a system,

a process, or a method.

Generally you cannot,

because the system itself

is kind of an idea.

remember, it's the expression

in tangible form that, can

be, protected with copyright.

but, My opinion is not

the most important thing

that's happening here.

The most important thing

that's happening here

is making sure that

you are known as the

authority, in the space.

So I like to use the analogy

of the cook and the chef,

the work in progress Stage

when you're working on

your positioning, think

of your systems or your

SOPs or your templates

and things as the recipe.

And we're not worried

about being the cook.

I can't, couldn't do

a thing with any of

anyone's recipes, frankly.

But you need to worry about

being the chef and given them

Michelin star service and

that is that work in progress.

state is.

Building those systems.

even if they can't be

copyright, they're very

valuable In enhancing your

brand and your positioning,

you become the authority

with respect to the outcome

that your framework provides,

and there is potential to,

protect it with trademarks.

if you heard me talk about

copyright versus trademarks

before, you know my.

gross bias is toward

copyrights that when you

have corporate clients,

your corporate clients,

don't care what your

trademark is, frankly.

so as long as they get the

outcome that they receive, you

can call it anything you want.

if you fall in love with the

name, then you fall in love

with the name and, trademark

lawyers will certainly tell

you if you have a name that

it would kill you to lose

then, go for your trademarks.

But when we're talking about

like where to put our focus,

it is in making sure we become

the authority in, the outcome

that your framework provides.

So that is the work in

progress stage where we're,

it's all about positioning.

Finally the finished

product stage.

Here we are squarely

in copyright

registration territory.

when you have an asset that

is going to be a direct

revenue driver, meaning

something that you are selling

directly to the end user,

it makes sense to register

it in the copyright office.

So just a reminder that

your copyrights attached.

As soon as you created them,

you put them in tangible form.

But registration is required

if you want to enforce

your copyrights against

an infringer in court.

So to use courts, for

compensation and to,

enforce your rights

against infringers.

it does need to be registered.

And if it is registered in

a timely basis, then there

are also statutory damages

that are available to you.

So there are, a number of

business reasons in order.

to encourage registration

for those things that

are revenue drivers.

So again, the finished

products, you know, your

group trainings and programs,

courses, books, et cetera,

and productized services,

probably cannot be registered.

but maybe some of the

underlying materials

can, templates and then

licensing, you You've put

together a whole program,

around your framework that

includes, workshop materials,

scripts and worksheets

and things like that, and

those things that are being

licensed to your licensees.

You would certainly want

to have those registered.

So in some you have

inventory and the form that

it takes is intellectual

property, and you have that.

At every stage of your

expertise-based business, it's

not all about registration,

as I just mentioned.

It starts at the beginning

when you're starting to

develop your expertise that

you're, making sure that

you're putting your original

ideas, intangible thought.

Form so the

copyright attaches.

At that time, you are

making sure that you

are using contracts with

your subcontractors.

Always you are reading any

agreement that the client

puts in front of you to

make sure that there are no

restrictions yeah, you're not

giving them your expertise.

and I forgot, you know,

I'm just gonna throw this

in, uh, and you've heard

me talk about it before,

is making sure that there's

not non-compete provisions

in there or anything that

restricts your ability

to develop your expertise

by working with other

clients on similar matters.

You, really wanna make

sure that you are reading

those cuz those are niche

killers and frankly,

they're expertise killers.

and then, the same as

with any company that

has inventory retailers

or car manufacturers.

You need to make sure you're

tracking it and then you

know what you own and what

you control, whether it is

something that is original

to you, something that is.

Created by a subcontractor

and assigned to you through

contract or something that

you are licensing from a third

party through a certification

program or, through research

and that you are tracking your

rights in your intellectual

property inventory, cuz

that is the only way

that you can protect it.

So I have created a visual

summary of today's episode.

you can find a link to

that in the show notes just

to help you kind of wrap

your head around it, I've

talked about a lot here.

So of course, as always, you

can find me@thinkbeyondip.com

if you have any questions.