How to Protect Your Idea Before You Start a Business
So you have an idea for a great new business venture? Congratulations! With a lot of hard work, you’re looking at a bright and profitable future.
Keep in mind that you’re in a delicate stage, though. Countless businesses are doomed before they even start simply because of a small mistake.
In a business’ early stages, one threat is that someone else will steal your idea. No matter how unique or specialized your business may be, this is a risk every entrepreneur faces before even registering a business.
Here are some tips on how to protect an idea.
How to Protect an Idea for Your Business
If you have a truly great idea, it’s easy to understand why someone will want to steal it. There are steps you can take to secure your idea and your financial future.
Keep the Details to a Minimum
It’s easy to get caught up in the excitement of a great new idea. When you find the key to a viable product or business, you want to shout it from the rooftops.
As challenging as it is to hold back, it could be the only factor that saves your business. You can be as vocal as you want about the basics, but don’t reveal enough information that the person could use your idea for themselves.
This is an easy line to draw when you’re working with a new chemical compound or mechanism that sets your idea apart. All you need to do is avoid giving away that “secret recipe.” It’s more challenging if that idea doesn’t apply to your situation, so be cautious about what you say.
Keep in mind that you’ll probably need to reveal more of these details to investors or lenders. They need to know that your business has the legs to go the distance. In these cases, a simple confidentiality notice on your business plan can give you security.
Be Careful Before Taking a Meeting
As we mentioned above, investors and lenders are in a unique position to learn more about your innovation. You might be tempted to meet with every investor or lender who will see you, but do some digging first.
As unethical as it is, it isn’t unheard of for these professionals to use an entrepreneur’s information for their own benefit. Fortunately, the internet makes it hard for these people to hide.
Before you take a meeting with any business partner, investor, or lender, do some research about them online. Search for any legal problems regarding intellectual property, particularly if they lost or settled the suit. If you know anyone in the industry, it’s a good idea to ask about the person’s reputation as well.
Be suspicious of anyone who contacts you instead of you contacting them. If they say someone referred them to you, check with that person first. Be discrete about your concerns, but investigate them well.
Use a Non-Disclosure Agreement
Non-disclosure agreements are common practice in the business world, and you should never overlook them.
You don’t need to have investors and lenders sign a non-disclosure agreement, and in fact, some may get offended if you ask. That’s why we recommend a confidentiality notice on your business plan instead.
However, a non-disclosure agreement should be standard paperwork for any employees. You should also require them for associates, independent contractors, and anyone else who could access sensitive information.
Pursue a Patent
If you have a unique idea or formula that sets your business apart, a patent is a crucial step. It’s not as simple as new business owners tend to think, though.
The patent application process is long and complex. Many businesses choose to hire a specialized lawyer to pursue their patent. Keep in mind that it often takes years to get a patent in Canada. A lawyer can help you keep the process moving and do your part to protect your information as soon as possible.
Keep in mind that you may be racing against other people with similar ideas. If you delay, someone else may file a similar patent first and get the rights to your idea, even if you had the idea first.
Trademark Your Business Name
This is another lengthy process that you should start as soon as possible. If your new idea will be your first business venture or if it doesn’t fit the brand of your existing business, you need to establish a new business name.
Trademarking your name is important to do before you start publicizing the business name. This is especially true if the name is related to your current business or if it’s a clear reflection of your idea.
For example, let’s say you already have a business called Crown Ontario Doors. You come up with an innovative new window design, so you want to create a new business called Crown Ontario Windows. If someone else gets that name before you do, it could confuse your customers and send them to that competitor.
As an added bonus, trademark applications provide documentation of when your idea was in the works. This can help in case someone else claims your idea in the future. Just remember to start with a business name search to make sure your name is original.
Go Overboard with Documentation
As you develop your idea and your business, there’s no such thing as too much documentation. Create as many notes as possible and save them in multiple secure places.
For instance, let’s say you’re formulating a new type of glue. Keep notes of your theories and the results of all your testing. Write down what formulas you try and what problems each one had.
Even if your idea is more of a strike of inspiration than a scientific analysis, document it. Write down your idea as soon as you have it and note the date as well. As your idea or plan evolves, take notes of these changes.
You can even take screenshots of sections of your search history while you do research. If you ask specific questions from other experts to help you develop your idea, do it in writing and keep the records.
Remember that videos can be great documentation as well. Take videos of your experiments or of you discussing your latest developments.
Put yourself in the mindset of a lawyer. Any evidence that you’re developing this idea should go into a secure folder.
Take a Hard Look at Your Cybersecurity
In today’s digital environment, someone could steal your idea without ever meeting you. Cybercrime runs rampant, and thieves can make far more with a business idea than a few credit card numbers.
Whether information is in the cloud or on your local device, it could be vulnerable to hackers. Try these tips to enhance your security:
Keep Your Software Up-to-Date
Many business owners put off software updates for their operating systems and other software they use. They’re worried it will cause problems or lose their data, but this is one of the biggest mistakes you can make.
If a software company releases an update, it’s often because they noticed a security problem. They may be keeping it quiet to protect their image, but they put out an update to fix the problem for the future.
Unfortunately, hackers often find out about security holes before the software companies do. Every day that passes is an opportunity for them to find it and steal your information.
That’s why checking for and installing software updates often is so crucial. It’s also why so many web browsers are installing their updates automatically, so you can’t miss one and keep a security hole open.
Back Up Your Data
Some business owners think that if they have multiple versions of their data, that means there are multiples ways hackers can get it. As long as those are all secure locations, though, you’re leaving yourself vulnerable in other ways.
As we mentioned, it’s understandable to worry about your data getting lost in the midst of a software update. If you have a backup, though, this isn’t a concern.
Backups also protect you from hackers holding your information for ransom. They’ll use “ransomware” to lock all your files and tell you that they’ll delete them if you don’t pay them a ransom. If you have a backup, they can delete to their hearts’ content.
Password-Protect Secure Information
This sounds like a simple step, and it is. However, it adds an extra layer of security no business owner can afford to pass up.
Most word processing programs have the option to add a password to a document. Do this with any documents that could be used to steal your idea, regardless of where they’re stored.
Take Advantage of Two-Factor Authentication
Another simple yet crucial cybersecurity tool is two-factor authentication. Most cloud storage sites and many other sites have this as an option at no cost to you.
With two-factor authentication, you normally entire your password for the site first. If the password is correct, the site will call, text, or email you a one-time-use code. You need to enter that code on the site to get access.
In this case, someone would need to have your password to the site as well as your phone and be able to access your phone. The chances of that happening are very limited.
Steer Clear of Autofill Options
As convenient as it is to have your browser fill in your password automatically, it’s a big security risk. If someone gets your computer, they’ll also get access to all these sites and storage places. It’s worth your time to keep your information secure.
Keep Your Associates Happy
It’s not ironclad, but a bit of kindness can go a long way. As psychologists have analyzed people who steal, they find that these people tend to rationalize their theft. They convince themselves that the person doesn’t deserve the money or they use it as revenge.
It’s good practice to always take the high road, but it makes financial sense as well. People are less likely to steal your idea if they respect you and want to see you succeed.
While you shouldn’t let anyone hold you hostage, trying to keep a positive manner and do right by your associates is good business sense. You’ll protect your image and your business while maintaining friendships that could help you down the road.
Still, it’s never safe to bet on other people’s consciences. This should be a complement to the tips above, and it should never be your only security measure.
Take Legal Action if Necessary
The purpose of all the tips above is to protect your ideas from theft. Unfortunately, sometimes it happens despite all your best efforts.
If you find that your information has been stolen, it’s important to take legal action. Even if it doesn’t seem like a threat at the time, businesses can grow quickly and take away your ability to compete.
It’s also important to take legal action to set a precedent. This infringement might be small, but you could face a larger threat in the future. If a judge sees that you don’t normally enforce your rights but chose to down the line, it may hurt your chances to win the important lawsuit.
In many cases, you won’t need to go as far as a lawsuit. A letter from a lawyer will show that you’re aware of what the person is doing and that you’re prepared to take legal action. This is often enough to make the person back off.
Protecting Your Business from Infancy
Sometimes researching security measures can make you even more terrified of someone stealing your idea. Rest assured that a healthy dose of caution is necessary and that there are ways to keep your business safe.
The key to all the steps above is promptness. Even if you don’t think your idea will come to fruition, it’s not worth the gamble. Put security practices in place now to protect your business.
For more specialized help starting your company, make sure to check out our blog.