5 Times Non Compete Agreements Are Crucial For Small Business

If you own a small business, you have probably thought of creating a non compete contract for your employees to sign. However, you may have also heard the heated debate surrounding this topic. Non compete contracts are a controversial idea for business owners. But there are many reasons why businesses should have employees sign a non compete agreement. Find out when you should use one in the post below.

Shield Employees From Competition

Without a non compete contract, your employees may be poached by competing businesses. This is obviously the number one reason that small businesses make use of these legally-binding documents. This can also be beneficial to your employees as well, who could be lured into poorer working conditions with the promise of a larger check to only be fired a brief time later. If you want to protect your business and its employees from competitors trying to poach talent, non compete agreements can help you do that.

Protect Your Trade Secrets

If you want to protect your trade secrets, non compete contracts are a must. These agreements will make certain that your intellectual property can never be shared with anyone, particularly competing businesses, much like a partnership agreement. This is true both while they are employed with you and after they move on in their careers. Non-compete agreements are one of the best ways to protect trade secrets.

Retain Customers And Clients

Small businesses rely on every single customer to help them meet their monthly goals. Losing even just one could be disastrous. A non-compete contract helps you retain customers and clients that are have a very close professional relationship with an employee of yours. Usually, when a client’s point person leaves a company, they follow them to their new employer. Non-compete contracts make certain this does not happen.

Protect Your Monetary Investment

When you invest in an employee’s training, that costs time and money. You want to make sure that money does not go walking out the door for a new employer weeks later. Non-competition agreements do not allow for this to happen. When you invest time and money into an employee’s professional development, like an advanced management program, make sure they use the new skills at your business. Get them to sign a non-compete agreement.

Enhanced Company Value

If you plan on selling your business, non compete agreements offer you increased value. Non-compete contracts protect the value of your business. It allows potential buyers to know that they are getting their money’s worth with their purchase. Restrictive covenants, or non compete contracts, will help you to earn top dollar for your business. This is another reason you may want to consider having employees sign them.

If you are a small business owner, having employees sign restrictive covenants can greatly improve the value of your business. It will also help you protect your trade secrets, investments and business data. Consider creating a non-compete agreement in order to protect your intellectual property and more. You are sure to not regret it.

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