In this season of behind-the-scenes business growth, I've been flinging around non-disclosure agreements like crazy with potential hires and collaborators.
Why? It's not appropriate to tell people about your projects after you've already entered into a client-contractor relationship. If it's a bad fit with your hired contractor, or they're the wrong partner for the joint venture, you'd want to know to know before you agree to pay them non-refundable deposits and promise them the world, yes?
A non-disclosure agreement, or NDA as it's more commonly known, is a sort of pre-contract contract. In consideration of your time and ideas, the other party agrees not to go around telling the world about what you're creating if you two end up parting ways. The way you ensure this is by:
1. Making your potential hire or collaborator sign your NDA
2. Making sure if the other person or people who sign violate the NDA, there's substantial financial penalties (that they've now agreed upon ahead of time in your lovely little NDA).
Since ideas are barely ever protected by intellectual property laws in the US, the NDA is a brilliant way to make sure you aren't just gifting your ideas to a graphic designer or the like, who could easily turn your ideas into a product (and in fact, this is probably the reason you are hiring this person in the first place!)
If you're on the fence about whether you need an NDA, here are some ways to tell when one is necessary (click here to grab the full list):
- You're hiring someone to design a product for you (a workbook, magazine, course, website etc.)
- You are going to be sharing your trade secrets. You'll know if you are dishing your trade secrets if the person you hire is going to learn about your processes, where you source materials from and/or your workflows (<< this is all proprietary information that took you years to cultivate, don't forget that!!)
- This person or these people will have access to your clients' names, emails or other sensitive client information that you wouldn't want to be responsible for publishing for the world to see.
- If the person or people you shared the information with could profit or otherwise independently benefit from your idea, an NDA is a must!
- You're talking about the "what" right now, but you want to talk about the "how."
- You can't afford a $5k+ legal bill right now. Proving that something was your idea is much more difficult without an NDA in place. Plus, like I said, ideas in and of themselves aren't protected by law.
- Grab the full list with real-life examples by clicking here.
If you're interested in investing in an NDA for your future collaborations and business ventures, click here for the exact NDA I use in all of my collaborations and before I hire new contractors.