Your trade secrets are invaluable – after all, your “secret sauce” is your competitive advantage, the thing that makes your business unique and special.
A non-disclosure agreement (NDA) offers a means to protect valuable company information from being shared with the public or leaked to competitors. An NDA – also known as a confidentiality agreement –specifies that another party cannot share proprietary information without your consent. Some examples of proprietary information include company data, records, intellectual property, and software.
For small business owners, NDAs are a good idea when you hire a new employee, bring in a business partner or consultant, or sign on with a new supplier or vendor.
The ABCs of NDAs
Now that you know why confidentiality agreements are important, here’s what you need to know about drafting one.
A non-disclosure agreement should include the following information:
You can get a sense of what an NDA looks like by searching for free templates online. However, it is highly recommended that you consult with an attorney before signing a confidentiality agreement with another party. A poorly written legal contract may be difficult, as well as costly, to enforce.
If your company’s proprietary information is valuable enough to protect in writing, it’s worth the expense of doing it right. Consider having a well-written, legally-binding NDA in a place a cost-saving strategy for your business.
It’s impossible to put a price tag on what may have been lost when a NDA has been breached. The best policy for entrepreneurs with a trade secret? As best you can, for as long as you can, keep your secrets to yourself.