by Paula Anderson
As a new entrepreneur, you have found your passion and want to share your products or services with everyone. Owning a business can be viewed as a pathway to financial independence and security.
We live in a free enterprise society, and we have the ability and power to get wealth. In Deuteronomy 8:18, it reads: “But thou shalt remember the Lord thy God; for it is HE that giveth thee power to get wealth, that He may establish His covenant which He swore unto thy fathers, as it is this day.”(KJV)
An important lesson in entrepreneurship is protecting your idea, vision or dream. Since we live in a world where there is competition and the desire to make money from another person’s idea. Entrepreneurs need to consider obtaining legal counsel before sharing your ideas with the world.
Before you begin the marketing and promotions of your product or service make sure you have some standard contractual agreements.
According to T. Kevin Bruce, attorney, “confidentiality, non-disclosure and non-compete agreements are important to all businesses, but especially so for small and start-up businesses.” You may have a trusting relationship with an employee or business partner, but an agreement can lay out what is expected from both parties.
A confidentiality agreement will protect your business when you disclose business and marketing strategies and financial plans to business partners, clients, employees and vendors.
Most entrepreneurs are trying to cut costs during the initial stages of starting a business. It is best to seek the advice of an attorney before you engage in any financial arrangements with a business partner, client or employee.
Bruce adds, “In my experience, I have found that, even when people begin their relationships with the best of intentions, things tend to change when real money comes into the picture.”
Agreements are made to protect your financial interest. It is best to not sign an agreement under pressure or before you have had enough time to read, review and consult an attorney on your behalf.
In the movie, Straight Outta of Compton, the character played by Ice Cube is an excellent example of not allowing someone to pressure you. He understood that he had a right to know what he was signing. He was not influenced by the other members of the group. And he made a decision to walk away from the deal.
Another business contract is a non-compete agreement, which means that you cannot do business with any other company that offers similar services. Bruce says, this type of agreement is important to small or start-up businesses because they can be viewed as being “vulnerable to someone else, particularly someone with greater resources or more extensive relationships, stealing their idea and implementing it faster or more thoroughly than the entrepreneur.”
I learned a costly lesson about not having a confidentiality and a non-compete agreement when I owned my first company. Because I failed to protect my interests upfront, my business partner capitalized from my idea.
All agreements need to be mutually beneficial to both parties.
For more information about contractual agreements, please contact T. Kevin Bruce, attorney at 901- 290-6614.