What Should A Business Plan NDA Contain?

A business plan forms the heart and soul of a business. It serves as a guidebook for launching the business and can slowly steer it towards success. The plan contains key details of the business setup, goals, operations, market data, strategies and financial information for conducting the business.

The entrepreneur needs to share this business plan with various parties before he can actually get down to launching the business. For instance, he will definitely show the business plan to various investors, financiers and banks for raising funds for the business. He may also need to run the plan by different vendors, engineers, customers, potential partners and so on.

However, the business plan encompasses proprietary information about the product or service, target customers, market research, management team, competitor analysis, financial projections and so on. The situation is ripe for misuse as any of the receiving parties can easily exploit the information without your permission or knowledge. They can use your ideas and strategies to start a similar venture or share them with others.

Therefore, it is imperative to protect the integrity of your business plan with a confidentiality agreement. This agreement is designed to prevent those who are given access to the business plan from disclosing the classified details to others.

Once a legally drafted non-disclosure agreement is signed by the receiving party, it becomes binding on them. But the contract should clearly lay out the following details:

• To whom it applies – The agreement should state in clear terms that the receiving party acknowledges the confidential information and is explicitly restricted from sharing, copying or disclosing the same without the express written consent of the business owner.

• What is the confidential information – The agreement should clearly define the scope of the confidential information that cannot be disclosed by the receiving party. This can be manufacturing processes, technical procedures, designs, documents, source codes, analyses, marketing strategies and so on. While the agreement can state that all the information is the business plan is confidential, too broad or vague definitions are usually not enforceable. It can also specify exclusions, if any.

• Time frame for the agreement – The precise duration for which the confidentiality is imposed also needs to be specified. The duration is usually short-term and extends till the proper launch of business operations. Certain agreements can even be perpetual in nature.

• Geographical areas – This limits the areas where the agreement is applicable. It should even define the jurisdiction of the court that will have authority to rule in case of a dispute.

• Specific remedies – In case there is a breach of the contract and the receiving party shares the confidential information, the agreement should lay out equitable and injunctive remedies for the loss. These remedies are mostly in monetary terms. However, injunctive relief can also be in terms of stopping the receiving party from breaching the agreement.

  In sum, entrepreneurs should clearly define the confidentiality agreement, else the business plan writers cost and effort will only go waste!

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