So, your business has reached a point where you can afford to outsource a few key pieces of your business management.
Maybe you’ve hired a virtual assistant or online business manager.
Most importantly, you’ve finally reclaimed precious time for yourself, your family, and all the bits of freedom you set out to create when you started your biz in the first place.
I don’t want to rain on your parade, but as an attorney for small business owners, I know how important it is to look at things from every angle.
And the hard truth is this:
Anyone with direct backend access can help you run your business…
But they can also potentially ruin it.
Take a look at the NDA checklist for online business owners so that doesn’t happen to you.
**Real quick before we jump in:
Everything I share is legal education and information. It’s not business, financial, or legal advice, and it doesn’t create an attorney-client relationship between us.*
Backend systems make you vulnerable
When you work with others to help run your business, build your business, scale your business, or create new opportunities for your business…
Your business is at risk.
That’s because you typically have to grant direct access to several “back end” systems and/or processes.
That might be through:
–Payment processing systems
–Social media profiles
–Sales page metrics
All of which have the potential to ruin your business if they’re mishandled.
So how do you ensure that doesn’t happen?
An NDA protects your business by ensuring anything you disclose to someone else about your business remains yours.
It also outlines potential legal ramifications if the agreement is broken or violated in some way.
Protecting sensitive information (and your business) with an NDA
The great thing about NDAs is that their main focus is confidentiality.
It prevents contractors you hire or work with from disclosing proprietary information to third parties and covers everything divulged within a specified time period.
Besides hiring someone to work for you, I’d also strongly recommend you consider using an NDA in the following scenarios:
–Working with potential investors
–Collaborating with another business owner
–Forming a joint venture (such as a summit)
–Even doing a social media takeover/swap
Basically, you want to use an NDA anytime you need to create a legal obligation to keep a secret.
NDAs allow you to protect:
–Your intellectual property (including trademarks you haven’t actually registered yet!)
–Sensitive information (like business plans, financial information, client details, etc.)
–Details of your discussions with the other party
The only information you can’t “keep secret” with an NDA includes:
–Information rightfully obtained from another party
–Information the other party had before you executed the NDA
–Information developed without use/reference of the private information
So consider this a good reminder to be careful what sensitive information gets divulged when.
The NDA checklist for online business owners
As for what your NDA needs to include, here’s the checklist I recommend business owners keep handy:
*Note: this is not an exhaustive list, but it’s a great starting point.
- Define the purpose of the NDA and include the full legal name of parties who will sign the agreement. (Also include a list of individuals the parties may and may not disclose the confidential information to.)
- Definition of confidential information (CI) and anything that is not considered confidential.
- Use (of CI) Restrictions (including how the CI will be destroyed once the contract ends, reporting the CI by law or regulation, and any limits on using the information – like whether another party can contact your clients or hire off your contractor lists.)
- Governing law, applicable regulations & remedies (including any GDPR, override of any data from click-through agreements, no representations and warranties, etc.).
- The term (length of time the NDA covers) and what would trigger an end to the NDA before the full term .
- Effective date and signature blocks.
Take that extra step to protect your business
I don’t want you to stress.
The hard part is almost over if you’ve already found someone you trust enough to help you run, grow, or scale your business.
But, getting an NDA in place is a necessary step every savvy business owner should take.
And the good news is that smart contractors recognize this as a sound business practice.
It helps protect them, too, so they should have no problem signing your NDA and agreeing to keep things confidential.
To make things even easier, grab your NDA template (and more) in The Legal Shop.
Learn even more about protecting your business when you join the list of exclusive listeners of the Uncomplicating Trademarks podcast.