A reader asks:
How do you protect a business idea?
As I explained in the post Can I Steal Someone Else’s Business Idea, there is no legal protection available for business ideas. The only way to totally protect your business idea is to keep it a secret.
Unfortunately that makes it rather useless. Sooner or later you are going to have to share your idea with the world. In the meantime the best you can do is to keep information on a need to know basis, only disclosing enough information to allow the suppliers, investors and partners you will be working with to deal with your business.
If you (or your investors) are still hoping to protect your business idea, then you are much better off focusing on how you are going to execute the idea, because while another business can legally copy your idea, you can get legal protection for your implementation of the idea through the use of copyright, design rights, trademarks and patents.
Asking John:
Do you have a business question you would like me to answer? If so you can Ask John or you can ask on the forums where you’ll get both my input and that of your fellow entrepreneurs.
This blog is about business opportunities and ideas that I spot, think of or hear about and think are useful and interesting. It is intended to provide ideas and inspriation for you to help you find the right business idea for you to then grow it into a successful business.
Hi John
Do you think that small business owners tend to over-worry about protecting their ideas? I think it’s a lot harder to move a business from idea to execution than people realize - so it’s not that likely that someone else will get in ahead of you even if they know your idea.
There’s also an advantage to not being the first to do something - strategically position yourself as a fast follower who can learn from another’s mistakes.
What do you think about being#1 - is it first mover advantage or the “bleeding edge”??
Liz
Liz,
Absolutely small business owners loose far too much sleep over the possibility that someone will steal there idea. They would be much better off focusing this effort on implementing their idea.
I’m of the firm belief that it’s better to be fast follower, let someone else make the mistakes, burn their research and development budget and prove the market, then learn from their mistakes.
I wouldn’t worry too much about people trying to imitate. It’s all in the planning. Execute fast, learn fast from your mistakes, get into the marketplace quickly again, serve your customers fast, get their feedback as fast as you can and evolve again….fast! before your competition can.
…oh and innovate fast too
So you’re saying small business owners should turn the tables - focus more on scanning the horizon to see what others are doing than worrying about anyone stealing their own idea? Any thoughts on the best way to stay apprised of what’s going on in the marketplace while you’re also busy building your business?
Liz,
Yes, small businesses would be much better off monitoring the “best in class” competitors and benchmarking themselves against them, then copying their best idea.
How you go about keeping appraised of the marketplace depends on the business you are in. Certainly trade journals (or the online equivalents) should be monitored. A local business should follow the local business press. Google Alerts are very useful for some.
One thing to remember is that it costs alot of time and money to defend intellectual property so dont bother going to the expense of patents etc unless you are prepared to defend it.
Absolutely Robert, most small businesses kid themselves wasting a fortune on IP protection when they simply could never afford to enforce that protection.