How much is your brand worth?
02-02-10
Quite a while ago, the tax department told me that one of my brands did not have any value and would have to be struck from my company balance sheet. I was surprised and asked the following questions?
1) What about the time I put in on writing the short story and screenplay to establish the concept and develop my idea? Their reply was that no value would be given for my work. The months of writing and time I committed to raising the funds to produce items based on the brand were not considered until I asked a few more questions:
2) What about the fifty bucks I spent on registering the copyright? I mean, the registration lasts until 50 years after I am dead and gone. Doesn’t that have any value. Okay, they would recognize that the brand had a value of $50.
3) What about the Trademark costs for Canada and the United States of America? Okay, after providing proof, they acknowledged the $1,500 for this cost could be retained on the books. After all, my Trademarks will last quite a few more years and are still valid .
4) How about the replacement costs for the board game? They said that since it was not in production at this time, they would not give me any value for the camera ready artwork, plastic metal molds to produce the tokens and other materials associated with the board game design. After a few discussions, it was made clear that some of the replacement value would be allowed if I could prove there was still a market for the game. This would only be proven by actual recent sales. The amount to reproduce the preproduction materials was around $50,000.
5) I convinced them that global internet sales would be satisfactory for their purposes and put a board game up for sale on eBay. It sold for $150 US – this shocked the government representative, who immediately told me that the sales price must have been an anomaly and I needed to sell at least three to get an average value. So I sold two more at over $100 US to his dismay. He thought I might get $12 each but had to agree that there was still a market for the product.
6) Then we realized that all the merchandise would need to be given a value and yet these assets would not be based on a sales price but on a manufacturing price and/or replacement value to make such products. So I provided the cost to produce the posters, comics, mugs, t-shirts and other items related to my brand and worked out a value.
7) I requested one last time to be given a value for the time and effort I put into the original story and screenplay but got the standard argument that until the script sells there is no way a price could be granted. I disagreed politely and stated that the value of my screenplay should be no less than the cost of photocopying the 118 pages at five cents a page. He admitted that would be fair (I didn’t think it was fair but it was a start).
What if I sell the script for the Writers Guild minimum? What if I sell it for $100 to a low budget producer or a friend? What if it gets produced into a movie and earns $100,000,000? What about the video game and graphic novel?
Even though I am willing to write and push all these variations of my brand forward there is a limit to what value the government revenue agency and/or any investors will allow. So what is your brand truly worth?
Only your imagination knows if your brand is priceless or worthless.
The more you develop and diversify your idea/brand, the more valuable it becomes. If you can’t sell the screenplay or get the film made, write the novel as this will allow you a second market to try and generate income from your brand. The more you diversify the project, the better chance you have of success and increasing your brand’s worth.
Some people believe a project’s value is only based on the sales it has, but what if the brand has never been produced in any form yet? Unproven…
Then the value is what you make others believe it is. For example: If you get ten investors to put up $10,000 each – then it seems easy to say that the value must be around a hundred grand or more. How do you convince people that your brand is worth that kind of money?
A worthy project/brand, a ton of confidence and a professional business plan. I co-wrote a prospectus business plan that helped list my company onto a stock exchange and banked $800,000. In a future post, I will be going over what should be in a proper business plan that will give you a good chance of raising real money with your brand.
First create a brand that is worth all the work of writing a business plan and going through the process of raising money, etc… This will help increase the true value of what your brand is worth!!
Tags: business plan, Sandford Tuey, screenplay, Value of Brands