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Just Zip It

A confidentiality agreement can give you the upper hand.

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This story appears in the November 2004 issue of Entrepreneur. Subscribe »

According to a Spanish proverb, "Secrecy is the soul of business." You may not have the recipe for Coca-Cola or KFC's 11 secret herbs and spices, but even data as mundane as a customer list can merit protection. For the entrepreneur who wants to preserve a competitive advantage, confidentiality can be key.

Obviously, the safest course is to reveal nothing. At times, this works. Playing things close to the vest is the default position in any negotiation. At other times, it's simply impractical. You may be able to postpone certain disclosures until you've reached an agreement in principle. But there comes a moment when one party must drop their drawers. Otherwise, the deal just will not close.

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