Understanding what intellectual property your business has, its strength and scope and how to use and leverage it is a prerequisite for every successful business.

Every single technology, product and/or improvement to our lives begins as an idea - as intellectual property (IP). For most businesses much of their value lies in these intangible assets and this intellectual property underpins their potential business success.

IP is often the result of years of hard work, in some cases costly trial and error and the business owner's passion and innovation.

Despite this many businesses fail to understand that potentially, IP has as high a value to their organisation as their fixed assets do. In many cases they may not even catalogue or manage their trade secrets, copyright, trademarks or inventions.

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IP can occur in both registered and unregistered forms. Registered forms which we are more familiar with include things such as patents and trademarks, but often it is the unregistered forms which are more important. These may relate to things such as trade secrets and confidential information.

These day-to-day processes, activities and networks are often missed in the conversation around business success because it is easier to focus on the more tangible elements such as product and service.

Intellectual property is critical because if you have a successful product but weak IP then there is nothing to stop it being copied by competitors.

And the more successful your product, the more attractive it would be to being copied.

If your product or idea is copied then you will lose market share and over time become just one of many delivering what was once an innovative or unique product or service.

Not surprisingly, the first challenge for the business owner is to understand what is it within their organisation that is their IP, how does it work and how is it used. Does the owner know how it is protected and what they have spent to protect it?

Answering these questions can help the business owner understand how they can manage and use their IP. If, in trying to answer these questions, the owner realises they really do not know what their IP is or how they manage or protect it, they can seek help to develop an appropriate strategy to protect those intangible elements that are critical to their business success. Because without the right strategy they will find themselves more vulnerable to competition than they need be.

■ Tony Collins is the Northland Chamber of Commerce's chief executive.