A business plan is a roadmap that outlines the vision, objectives, and operations plan of a new or growing business. It includes key information such as market analysis, financial projections, marketing strategies, and operational procedures, providing a comprehensive overview of the business’ objectives and growth plan.
In developing your business plan, protecting sensitive and proprietary information is important. A confidentiality statement included on the cover or first page of your business plan helps you safeguard confidential data.
Similarly, a Non-Disclosure Agreement (NDA) is a document you can request potential readers sign before giving them access to your business plan. NDAs state what information shared in your plan can not be disclosed to others. It is important to note that most investors and lenders will not sign an NDA. So, you’ll need to keep that in mind.
Both the confidentiality statement and NDA help shield sensitive information about your company.
Purpose and Scope of the Confidentiality Statement
The primary purpose of a confidentiality statement is to emphasize the confidential nature of the information contained within the business plan. It serves as a formal acknowledgment of the recipient’s responsibility to maintain the confidentiality of the proprietary data and insights shared by the business. By clearly defining the scope and parameters of confidentiality, the statement reinforces the business’ commitment to protecting its intellectual property, trade secrets, and strategic business insights from unauthorized access, distribution, or exploitation.
Examples of Confidentiality Statements For Business Plans
Here are a few examples of business plan confidentiality statements that you can use as references or templates for drafting your business plan confidentiality agreement:
Simple Business Plan Confidentiality Statement:
Comprehensive Business Plan Confidentiality Statement:
Confidentiality Statement for Business Plan Presentation:
While such confidentiality statements are far from 100% legal protection, the goal is to dissuade readers from divulging information about your plan and company.
What is a Business Plan Non-Disclosure Agreement?
A Non-Disclosure Agreement is a legal document you ask people to review and sign before letting them review your business plan.
The main purpose of a business plan Non-Disclosure Agreement is to safeguard the intellectual property and confidential information of a business. This may include, but is not limited to:
- business strategies
- financial projections
- marketing plans
- customer lists
- trade secrets
- proprietary technology
- other sensitive information that gives a business a competitive advantage
By signing a Business Plan NDA, the recipient agrees to keep the information confidential and not to disclose, use, or exploit it for any purpose other than the intended business relationship.
What Key Elements are Included in a Business Plan Non-Disclosure Agreement
A well-drafted Business Plan NDA typically includes the following key elements:
- Definition of Confidential Information: Specifying what information is considered confidential and protected under the agreement. This may include a broad or specific definition of confidential information, depending on the needs of the parties involved.
- Obligations of the Receiving Party: Outlining the responsibilities of the recipient of the confidential information, including the duty to maintain confidentiality, restrictions on disclosure and use, and the requirement to return or destroy the information after the business relationship ends.
- Permitted Disclosures: Identifying situations where the recipient may be allowed to disclose confidential information, such as to legal or financial advisors, or as required by law.
- Term and Termination: Establishing the duration of the NDA and specifying the conditions under which it can be terminated, such as by mutual agreement or by breach of the agreement.
- Remedies for Breach: Outlining the consequences of breaching the NDA, such as damages, injunctive relief, or other remedies available under the law.
- Governing Law and Jurisdiction: Specifying the applicable law and jurisdiction that will govern any disputes arising from the NDA.
Sample Business Plan Non-Disclosure Agreement:
Below is a sample business plan non-disclosure agreement (NDA). Since we are not lawyers, we recommend that you have a lawyer review any NDAs you plan on using.
[Recipient Name]
This Non-Disclosure Agreement (the “Agreement”) is made and entered into as of [Date] by and between Your Company Name (“Disclosing Party”) and Recipient Name (“Receiving Party”).
Definition of Confidential Information: The term “Confidential Information” shall mean any and all information disclosed by the Disclosing Party to the Receiving Party, including but not limited to business strategies, financial projections, marketing plans, customer lists, trade secrets, proprietary technology, and any other information that is not publicly available.
Obligations of the Receiving Party: The Receiving Party shall use the Confidential Information solely for the purpose of evaluating the possibility of a business relationship between the parties and shall not disclose or use the Confidential Information for any other purpose without the prior written consent of the Disclosing Party.
Permitted Disclosures: The Receiving Party may disclose the Confidential Information to its employees or advisors on a need-to-know basis, provided that such employees or advisors are bound by similar confidentiality obligations.
Term and Termination: This Agreement shall remain in effect for a period of [insert duration, e.g., 2 years] from the date of execution, unless terminated earlier by mutual written agreement or by breach of this Agreement. Upon termination, the Receiving Party shall promptly return or destroy all Confidential Information and provide written certification of such return or destruction to the Disclosing Party.
Remedies for Breach: In the event of a breach of this Agreement, the Disclosing Party shall be entitled to seek equitable relief, including but not limited to injunctive relief, as well as damages for any losses incurred as a result of the breach.
Governing Law and Jurisdiction: This Agreement shall be governed by and construed in accordance with the laws of [insert applicable jurisdiction such as “California”]. Any disputes arising out of or in connection with this Agreement shall be resolved exclusively by the courts of [insert applicable jurisdiction].
Entire Agreement: This Agreement contains the entire understanding between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, whether oral or written, relating to the Confidential Information.
Binding Effect: This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
By signing below, the parties acknowledge and agree to the terms of this Agreement:
[insert name, signature and date lines]
Summary
While there’s no way to fully ensure details about your business plan will remain confidential, confidentiality statements and NDAs are two tools you can use to limit your exposure. Confidentiality statements often dissuade readers from disclosing sensitive information. Non-Disclosure Agreements (NDAs) provide more protection than confidentiality statements since recipients must specifically review and sign them, thus agreeing to the terms and conditions.
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