How Can Startups Protect Their Business Idea
Pitching ideas becomes increasingly important as a business grows. Turning your ideas into reality requires collaboration with many parties (when seeking investors, clients, or new employees), which means that you need to reveal your ideas to all of them. By doing this, you’re putting your business at risk. You have to be very cautious in choosing to whom you disclose sensitive information. Your idea may fall into the hands of your competitors who could use it, leaving your business with little recourse.
The truth is, most people aren’t out to steal your ideas, but it always remains a possibility. Thus, you should know what you can do to protect your idea and prevent it being shared with others.
Reveal Only What Is Necessary
Don’t reveal too much, but only what is absolutely necessary for a potential client to understand the idea. Don’t share every single detail of how everything works, nor the need your product or service meets. On the other hand, when presenting your idea to potential lenders or investors, they’ll most likely want to know everything about your idea before taking the financial risk of investing in it.
Document Everything You Can
In case of any legal issues, documentation is the first thing you can fall back on. So, leave a paper trail of every interaction and activity (wherever you’ve disclosed sensitive information). This way, you’ll be aware of the information you reveal to each organization or individual you’ve discussed it with. Paper is the medium of law, and without it, the court won’t be able to assist you. If you’re starting a business in Australia, you can work together with a qualified Parramatta solicitor, who can point out to the most important documents you’d want to keep in check.
Use Non-Disclosure Agreements (NDA)
An NDA can help protect your business idea before revealing it to your associates. If you want investors, this may be something that you’ll have to give up. Many of them will balk at signing an NDA before they speak to you. It’s the same with potential clients, instead of getting signature, just print a confidentiality statement on your business plan.
Research The Recipients
When you reveal your ideas to possible clients or investors, you should research that company prior to your appointment. Due to the wide availability of information today, a business owner can determine the reputation of a person or company before deciding to do business with them. Look for any disputations with previous business partners, and make sure that they’ve established a positive reputation in their chosen field.
Trademark Your Name
Since the name of a company is often closely tied to its idea, a trademark can provide an additional layer of protection. Establish a trademark and you will have added protection in case any legal issues should arise. After registering a trademark, the documentation required for the process can serve as proof that your business idea was in development for a specified period of time. This can help the court of law in establishing the exact date when your idea was being developed (in case someone else tries to dispute the fact).
Follow Your Instincts
Natural instincts shouldn’t be neglected, but coupled with the research. Whenever you’re in a situation that could present some danger, alarm bells go off. If someone is interested in hearing every detail of your business idea, ask yourself what their motives could be. Is it just out of curiosity? Do they want to invest in your business? Or do they have money ready to be invested, but no idea of their own? If you’re talking to someone with a portfolio of successful companies and experience then they wouldn’t steal anyone else’s idea. However, if you’re speaking to a newbie, refrain from revealing too much about your business until you’re sure in that person’s motives.
On the one hand, you don’t want anyone else to steal your idea, make a move on it, and create a successful business before you get a chance to do it yourself. On the other, it’s important to share your plans and ideas with experienced people (despite the risk involved), because withholding them will just inhibit your business growth. Learning how to sell an idea, whether to investors, partners or clients is essential to move ahead. By taking the listed precautions, you’ll have nothing to worry about, because you’ll reduce the chances of someone stealing your idea.
About the Author
Emma Miller is a marketer and a writer from Sydney. Her focus is digital marketing, social media, start-ups and latest trends. She’s a contributor to Bizzmark blog and a mother of two.