Entrepreneurs naturally fear that their new idea will be stolen, and with it their dreams of entrepreneurship and starting their own business. But there is a dilemma that to launch their new business they must talk about that new business idea with bankers, investors, and potential employees
Getting a patent to protect your new business idea is great but often unobtainable for most entrepreneurs due to high costs, legal regulations plus the long waiting time for issuance of a patent. Some entrepreneurs with significant startup budgets use formal and costly methods, such as provisional patents and trademark registration most startups don’t have the capital at their onset.
Smart entrepreneur instead can use these seven tips, most which are free to both protect your intellectual property and also get your new business launched – without a patent.
7 Ways to Legally Protect Your Business Idea – Without a Patent
1. Get to Know Them First
In advance of your business meeting with potential partners carefully research them online – both their company and them personally. Input the owner’s names into Google and learn about their lives and their past business deals. Are they trustworthy and have they practiced good faith in the past?
By reading their social media profiles, forum comments and news articles you can get a good impression of the sort of person they are.
2. Get Competitors To Support Your Success
Believe it or not, your competitors could be your best partners in securing your business ideas if you make them part of your success team. Hire them to be your manufacturer or to distribute your new product line. Now they will have a vested interest to keep your business ideas a secret because they will benefit from your success.
Know that your market competitors are the people most likely to steal your idea so disarm them bring them into your plans. Additionally, those competitors can bring your new product to market quickly, beating you to the retail stores, so getting them on your side is a smart win-win move.
3. Business Ideas are Not Companies
While a good idea is the start of a great business, it is not yet an actual profitable company. Likewise, not all great companies were born of brilliant new ideas. Starbucks did not invent the concept of the local coffee shop. Instead, they innovated and improved upon a winning idea already in the marketplace.
Liken your business idea to the grain of sand that over time, and with lots of work on the clams part become a pearl. Nobody is going to steal grains of sand.
4. Becoming an Entrepreneur is Not For Everyone
New entrepreneurs wrongly think that because they are super excited about starting a business with their new idea that everyone must want to do the same.
However, the majority of the folk that they discuss their business plans with are not natural born entrepreneurs. Bankers, venture capitalists, and managerial candidates are not inclined to change careers and become startup entrepreneurs, it is just not in their nature, nor are they interested in being business owners.
5. Investors Won’t Steal your Invention
All professional investors, whether Angel investors of Venture Capital firms are the safest place to discuss your ideas because their good reputation is at stake. If they stole entrepreneur’s business ideas, they would be out of business in a flash.
Thus they would not even think about committing such fraud. Do keep in mind though that when you present your new product ideas, it is entirely possible that these investors heard the same idea from a different entrepreneur last month.
6. Leave a Key Ingredient Out
When you present your new your product design don’t reveal every little detail and the exact manufacturing process. To protect yourself keep trade secrets to your as insurance against theft.
In the initial stages of investment pitches and interviewing job candidates full-disclosure of your business idea is not necessary nor advisable. As you progress with investors business partner and employees negotiations, then you can include more details and use the proper legal documents such as a non-disclosure agreement which is discussed in detail below.
7. Use Non-Disclosure Agreements Carefully
The standard legal document used to maintain secrecy is called an NDA or Non-Disclosure Agreement. When signed by both parties it becomes a legally binding contract between you the owner of intellectual property, your new business idea, and the person whom you are telling, disclosing the information.
By signing this agreement, they agree not to tell anyone your new business idea. However, be forewarned that most professional VC Venture Capital investors will not sign an NDA and will be insulted when asked. Careful, you could sour a promising business partnership by being overly paranoid. The best way to get around this is to include a copy of this agreement in the business plan that you distribute at pitch presentations.
Author Bio: Marsha Kelly sold her first business for more than a million dollars. She has shared hard-won experiences as a successful serial entrepreneur on her Best4Businesses blog. Marsha also regularly posts business tips, ideas, and suggestions as well as product reviews for business readers. As a serial entrepreneur who has done “time” in corporate America, Marsha has learned what products and services work well in business today. You can learn from her experiences from shopping the internet for tools, supplies, and information to build your businesses and improve lives financially. TW, G+, FB