Three Ways To Protect Your Company’s Bottom Line

You'll encounter many challenges on the road towards building a successful business, and each one requires careful handling if you want to ensure your company remains profitable and viable for many years. Although it can be difficult to anticipate the issues you'll encounter on your journey, here are three things you can do to protect yourself.

Use Non-Disclosure Agreements

Every business has valuable information they want to keep secret, whether that's a marketing strategy, product development process, or client roster. Without the proper protection in place, though, that information could easily be leaked to competitors, which could be the killing blow to your business.

A good way to ensure proprietary information remains confidential is to make liberal use of non-disclosure agreements (NDA). This is a binding contract that prohibits people from divulging information about a particular subject matter to parties who are not authorized to know about it. Anyone who breaches the contract can be sued for compensatory damages.

NDAs are invaluable for setting boundaries and expectations, particularly in this era of social media where people feel compelled to share information online for internet clout. A well-written NDA can ensure your company's private data remains secret and take appropriate action if a breach occurs.

To be enforceable, though, NDAs must adhere to a specific format and include important legal language. So, it's best to work with an attorney to develop one that will withstand scrutiny from a judge and jury if an issue gets to that point.

Implement Non-Compete Agreements

Employees are the backbone to your company's success, and it's smart business to invest in their development so they can perform for you. However, it's also an unfortunate fact of business that these same employees can become a source of unwanted competition when they leave the company to strike out on their own.

You can somewhat prevent this issue by having your employee sign non-compete agreements. When implemented, these contracts prevent employees from entering into direct competition with your company for a certain length of time after they leave. This can include prohibiting them from working for other competitors or setting up their own businesses within a certain geographical area.

Tennessee courts generally don't have a favorable view of non-compete agreements because it's believed they put a restraint on free trade. However, the courts will enforce contracts as long as they are reasonable and properly written.

It's important, then, to have your contract drawn by knowledgeable attorney who can ensure the agreements adheres to the laws and can be enforced if breached.

Place Intellectual Property Clauses in Employee Contracts

If you have a business where your employees produce intellectual property (IP) on behalf of your company, you need to address who is the legal owner of those items. The laws typically side with the person who created the property, so failure to stipulate who owns the things the employee creates while working for you may result in you losing control of them when the employee leaves the company.

Placing an intellectual property clause in an employee contract is usually enough to protect your interest in the products your employees create for you. The clause should detail who owns the materials, how the materials will be used, and any compensation the employee will receive for their part in creating the intellectual property. It should also address whether the company owns any IP created by the employee off the clock but using company resources.

There are many other ways you can protect your business. Contact us today for advice and guidance on these and other tools you can implement to ensure your business thrives in this competitive world.