What Is an NDA and Why Your Business May Need to Have One

A Non-Disclosure Agreement, or NDA, is something that business developers use to protect their ideas, content and information from being stolen by people that they are working with, such as contractors or other outsourced freelancers. 

An NDA is a legally binding contract which requires the contractor to maintain confidentiality with regard to a specific project or idea, or a more broad statement that prevents disclosure of any details about the business.

A non-disclosure agreement is important when working with contractors, especially when you are working with web designers or writers who need plenty of specifics about your ideas, your company and your plans in order to perform the service that you require from them. 

Also, if you are working with sales personnel, and you want to discuss certain sales techniques and methods that you feel will be highly effective, then you certainly do not want them discussing this with  others—especially if they end up not working for you (or working for you for a short period of time and then leave to go elsewhere—don’t let them take your ideas with them!).

Drawing up a solid non-disclosure agreement may require the assistance of an attorney, but there are also plenty of sources online for discount or free templates that may do the trick. It does not have to be ultra-complicated, but it does have to cover you and your ideas and protect them from being disclosed or stolen without your authorization.

You will want to have any freelancers that you work with sign a non-disclosure agreement before you start discussing your business plans in any sort of detail with them. This may be especially important for those business developers who are working on new apps or software products, as these are often the ideas that are taken before they can be completed and you can prove ownership.

Also, if you have any employees or contractors who can access your list of client names, this may be worth protecting as well. 

One final note, you have to be realistic about the non-disclosure agreement that you have. 

There are a few downsides to having them, especially if you are not really protecting any critical ideas or information. It can start off a business relationship with a sense of distrust, as you are suggesting that the person you are considering working with cannot be trusted. 

More importantly, enforcing a non-disclosure agreement can be a hassle—along with being expensive and time consuming. You will have to hire an attorney and prove damages before you can win any case related to a non-disclosure agreement.

As an entrepreneur, it is never a bad idea to consult an attorney when you are developing your business or developing new products. You may or may not need to have an NDA, depending on your ideas and your process. So, take these facts into consideration when you are deciding whether or not you need an NDA to protect yourself and your business.


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  1. Cheryl, I loved your article on NDAs and will implement that immediately! Thank you! Would also like to be one of your beta testers if I’m a good fit.
    Terrie Porras

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