Do You Use NDA in Your Business?

Information is power. In some businesses, information can be a competitive advantage (example Google). That’s why you have to make sure that you guard this information from leaking out to the public and worse to your direct competitors.

Without ample protection, I guarantee you that information will leak out primarily because we’re dealing with different people from suppliers to contractors and we don’t have control over their mouths.

An NDA or non-disclosure agreement is one of the legal remedies you can resort to. It sounds really intimidating since it’s a legal jargon but trust me it will save your business in the long run.

Basically, an NDA will prohibit a person from revealing confidential information he obtained in a business transaction. Confidential info varies from business to business. It can be financial information, business process or even recipe (in the case of the KFC and Coca-Cola). Violation of NDA can lead to penalties and legal suit.

Do small businesses need NDA? Definitely. In fact, you need it more than those big corporations. If you have a proprietary product, for instance, you need to ask your manufacturers, suppliers, and other third party contractors involved to sign NDA before doing business with them. Unfortunately, not all small business owners practice this approach.

You don’t need to invent something new to enforce NDA. You can implement this on the vital aspects of your business. If an e-commerce store, for instance, is using third parties for its SEO, website maintenance and other functions, it can implement NDA.

Moreover, an NDA will allow you to test ulterior business motives. Some parties may refuse to sign this agreement for different reasons. Be very careful dealing with these groups. Unless there is a very logical reason for not signing an NDA, it’s better to walk away and seek new business partners.