Trade secrets come in many shapes and sizes – from computer programs to manufacturing processes to supplier lists and many between – but they all have one thing in common: they are key to your competitive edge.
Have you thought what would happen to your business if a competitor copied your proprietary business plans or supplier lists? What if they got their hands on your customer data or manufacturing processes? The results could be disastrous!
Protect Your Trade Secrets or You Could Face Business Disasters
Here are five very real disaster that your business could face if you don’t protect your trade secrets now:
1. Lost Sales
Customers flock to you because you have something special they want. If another company gets its hands on it, you could lose your luster and cease being the “go-to” choice for customers.
Think of it this way! If other beverage companies could create sodas using Coca-Cola’s secret formula (a valuable trade secret), many current Coke drinkers would start to buy from the competitor, especially if it’s cheaper.
2. Lower Profits
If you’re losing sales (see #1 above), you’re losing profits.
3. Degraded Brand Reputation
If another company creates a competing product using your secret data (a valuable trade secret) or markets products to your proprietary customer list (a valuable trade secret), you can’t exercise quality control.
If the products are substandard, customers might be confused into believing you are the source of them and associate the deficiencies with your brand. In other words, their confusion hurts your brand’s reputation.
4. Higher Supplier Costs
If your trade secret is leaked, the demand for the same resources or supplies you need to create your products will increase as competitors start buying them so they can build competing products.
It doesn’t take long for the law of supply and demand to come into play and increased prices on those resources and supplies will be an unwelcomed surprise for you.
5. Fewer Investors
What distinguishes one company from another? What gives one company a competitive edge over another? The answer to both question is its proprietary assets.
Investors are willing to bank on a company that has something different, something special, something that sets them apart. If those assets are compromised, investors will lose confidence in the company’s ability to realize a return on their investment and will withdraw their support.
Note – investors here means anyone supporting you with not just their money, but also time and talent. Professional services providers like IT companies who help you pro bono or delay billing you are investors. Mentors with experience in your industry who spend time with you are investors. The family and friends that loan you money are investors.
The Takeaway
You’ve worked hard to develop the trade secrets that drive sales and profits for your business, so be vigilant and protect them. You can avoid having one or more of these disasters befall you!