Turning a business idea into reality needs collaboration with and feedback from as many parties as possible. But this means revealing your idea to all these individuals and organisations, thereby putting your business at risk, and maybe even losing some sleep over it. You may be extremely cautious in choosing whom you disclose information to. But the truth is, the more the ears that are listening, more will be the chances of your idea falling into the wrong hands. Here’s what you can do to protect that idea as much as possible.
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Understand the legalities
Non-disclosure agreement (NDA) – This is the first option that comes to a novice’s mind. But here’s the thing – asking an investor to sign this before pitching your idea to them is futile. Investors are approached by many business ideas. If they sign a non-disclosure agreement each time, not only will they be ruling out investment opportunities, they will also be risking needless legal action. It is therefore best to exercise this only while revealing your idea to employees or other associates.
Provisional patent – Filing for a patent is a time consuming task that can delay the initiation of your business. Besides, it is also an expensive affair for an entrepreneur with a tight budget. You could instead file for a provisional patent that ‘holds’ your idea for 12 months until it expires.
Trademark – Creating a brand name and trademarking it can provide some protection as an idea is, after all, associated with the brand. A trademark also establishes the date that your business kicked-off. This information can be crucial to establish the fact that the idea was in fact yours. This is, however, a thin blanket of protection as it is only intellectual property rights than one can use to claim an idea as theirs.
Non-compete agreement – This agreement that can be signed with employees, distributors, or suppliers, specifies that these associates cannot enter into a similar trade with a competitor. It comes with a time period, and a two to three year agreement is reasonable to protect your business idea.
Legalities can have loopholes and should not be depended on entirely. It is therefore best to secure your business idea by taking the following measures as well.
Do a thorough research
Although you cannot get investors to sign an NDA, you can still do your part by checking their track records before approaching them. You could also check for complaints regarding their business deals. Getting the dirt on them, or any individual you reveal your business idea to, is necessary as that information will back your instincts. Sometimes, you will be approached by interested parties wanting to invest or contribute to the business. In such cases especially, your background research has to be thorough to understand their motives.
Sometimes, when faced by the prospect of a new client, many tend to enthusiastically reveal their business strategies. Keep in mind that only your investors will require details of your business ideas and strategies, and every other interaction should be on a need-to-know-basis. Be it consultants, employees, developers, or any other associate you bring on board, it is best to first decide what information is required for each of these individuals to function, and then disclose only that. Playing smart is the best protection you can provide to your business.
Document whatever you can
Try to set a paper trail for every activity and interaction, wherever you’ve disclosed information. Keep a track of your discussions with individuals and organisations, so you’re aware of the information you reveal to each. Documentation is the first thing you can fall back on in case of legal issues. Without a paper trail, the court will not be able to assist you as the medium of law is paper. The more you have in writing, the sturdier your case will be if you’re ever forced to take legal action.
Despite the risk involved, it is important to share your ideas and plans with experienced people in the business. Withholding your idea in the fear of theft will only inhibit the growth of your business as learning to sell your idea is crucial to move ahead – whether you’re head-hunting for clients, partners, or investors. If you take the said precautions and hire a lawyer for guidance in the legal matters, you really have nothing to worry about as the chances of someone stealing your idea are not very high, and definitely not worth losing your sleep over.