Login | Join Network
Lost Password

A password will be emailed to you.

Can you Take Clients with You When you Start a Business

After spending a significant period of time working for someone, you might want to launch your own business that may be a competition to the former employer. The situation is, without a doubt, beneficial to you, as you have a prior experience in the specific line of business. However, it is a nightmarish situation for the former employer.

Once you have decided to launch the business, there are a few legal factors that you might tend to overlook. Business employers often gain from a binding contract or an agreement that prevents its employees from becoming competition to the business. For instance, an employer will have an agreement which states that the employees are prohibited from contacting the firm's customers or clients for 6 months or a year after, starting from the time they leave the organization. In some other cases, agreements also prevent the employees to start or work in the same line of business in the same city or state.

Most of the states in the U.S have resorted to a form of statute called the “Uniform Trade Secrets Act". This prevents an individual from making use of the former employer's trade secrets even though there are no agreements or contracts.

Bearing such factors in mind, there are some guidelines you can follow. Never contact a client if he/she is a close contact of the former business. Try and avoid special discounts to only a few clients. If there is a discount, make it applicable to everyone you know. When you leave the business, avoid taking the client files with you. This works because you can focus more on creating new customers without the fear of legal offence. If you want to approach the old clients, proceed only when the stipulated time period on the contract is over.

  • Print
  • Digg
  • StumbleUpon
  • del.icio.us
  • Facebook
  • Yahoo! Buzz
  • Twitter
  • Google Bookmarks
  • LinkedIn
  • PDF
  • RSS
  • email

More on Entrepreneur21.net:

Gragg Advertising
Who we are Specializing in direct response strate...
Business Growth Strategies
The most successful approach to growth is an integ...
Conduct Business Market Analysis
Market Analysis is one of the first steps that is ...
10 Strong Start Up Tips
Get in touch with experienced entrepreneurs, and t...
How to Find the Right Product Source
Starting a new product line or starting up a new e...
Ron Dorfman, CEO of Air2Water
What would you think if someone told you that yo...

Leave a comment

Disclaimer: All pages within GenMembers network are expressions of the opinions of the site operator only, and no representation of factual accuracy is being made. The content is intended to create interest in various topics for our readers, who are in turn encouraged to conduct their own independent research. This site is not related to: Entrepreneur Media, Entrepreneur Magazine, Entrepreneur of the Year, Entrepreneur's Partner, Hispanic Entrepreneur, Entrepreneur.com, Entrepreneurs.com Entrepreneur's Only, The Entrepreneur's Source, Entrepreneur's Notebook or any of the many companies that use the word entrepreneur in there trade name. Please see our website Terms of Use for further information concerning your use of the site.