A New Restaurant

I’ve noticed on a lot of business plan examples, that they include a Confidentiality Agreement (aka Non-Disclosure Agreement). There’s a lot of discussion out there about whether this is necessary. Many people are of the opinion that it can really hurt your business plan.

Unless your idea is very advanced technologically, there’s probably not any reason for it. Is there really anything in the plan for your new restaurant that is so cutting edge that it needs to be protected? Probably not. Is it worth insulting the integrity of a potential investor to protect something that’s really not worth stealing? Definitely not!

The success (or failure) of your venture is based on your ability to execute the plan that you’ve developed. That’s what will get you your funding. If you can’t execute the business plan, it doesn’t matter how great your ideas are, your restaurant will fail.

This isn’t meant to discount the value of having great ideas. Those ideas are part of what gives you your competitive advantage. Coming up with great ideas are what will help you control costs, increase production, and improve customer service. Innovative marketing and promotion techniques will bring customers in the door. However, if your investors are turned off because you are expecting them to sign a Confidentiality Agreement, you may not be able to get a restaurant to attract customers.

If you insist on including the Confidentiality Agreement, you better have a backup plan if it doesn’t work well for you. Many investors will just refuse to sign the agreement; others will decide not to fund your project before they’ve even heard your presentation. Remember, getting funding is largely a product of how the investors feel about you. If they like you, and trust you, you get the money. If they think you’re a jerk…

Think twice before you include the Confidentiality Agreement in your business plan. It’s probably not worth the risk.