How to keep your recipe a secret in large scale manufacturing?

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Rowanne81

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hello there everyone....

My name is Mary and i've been a bit of lurker in these parts (and not a very active one at that ) but i kind of need advice from you guys.

Recently ive been asked if i want to go into large scale production of my soaps so as to sell wholesale and I was wondering among other things how would i go about protecting my recipe and keeping it secret.

I would need from atleast another person full time physically helping me make this large sized batches as i do have a day job (there goes method) and even if i master batched oils it would not be difficult to figure out ratios based on the days batch output compared to days end closing stock of ingredients used.(there goes percentages)

I am sure trust is important between business partners but it doesn't hurt to protect oneself either.

Any ideas or thought not just to the above question but to things i might have to consider in general going into this kind of a venture would be highly valued?

I am checking the internet simultaneously for information, but your valuable knowledge and experience is soooooo important too and hope you wouldnt mind sharing a few pointers....or places i can look for such information etc

Thanks in advance!!
 
If you master batched, you could always keep the main oils under lock and key so your help couldn't actually see how much oil you are going through.

Another option is maybe have them sign some sort of non dicloser agreement stating that they won't share any recipes/trade secrets or use them for personal gain.
 
Non disclosure agreements and weighing the oils out of sight of your assistant.

Make sure to have a damage liquidation clause. Ie, if you breach the contract, you owe me $X as damages.

Not legal advice, btw.
 
The Uniform Trade Secret Act has steps you need to follow. A confidentiality agreement is only one thing you should have in place.

It is defined as follows: information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (1) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and (2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

So basicly you need to take "reasonable" steps to insure secrecy. This could mean locking up your inventory, having your actual recipe under lock and key or password protected and or encoded. It is also a good idea to have a Non-Compete Clause.

If you are serious about this you most definitely should consult with an attorney.
 
Yep, what Dorymae said. If you're really serious about this, consult with an attorney in your state who has experience in this area of law. State law as well as federal may affect the specifics of what you have to do. This is not an issue to deal with on your own without an attorney's advice.
 
As above, but also - is it so big a deal?

I put money on someone else making a VERY similar soap to you, based on the oils. Sure, the scents may be custom and the look of the soap may vary. But the actual mix of oils is statistically likely to be out there already.

People are buying more than just a soap from you. They are buying in to your brand. You have this protected already, I imagine.

I would think that customer lists and things like that are more important to worry about when taking on someone.

Out of interest, if you need "at least 1" person helping you full time, but you are keeping your day job, why don't you just soap full time? That way you wouldn't need anyone else, but even if you did you could master batch etc there and all is well. It might not be so simple, but it is one thought..............
 
Yep, what Dorymae said. If you're really serious about this, consult with an attorney in your state who has experience in this area of law. State law as well as federal may affect the specifics of what you have to do. This is not an issue to deal with on your own without an attorney's advice.
Do reasearch before deciding on an attorney and make sure he specializes in business or corporate if you are going corporation. If you know anyone with a business find out who they use. Trust me I can tell you from experience there is a huge difference in attorneys. I had one tell me there was nothing we could do when we were going to get out from under bad partner, because of mistakes we made in the beginning, out of stupidty. To make a long story short I did research found a killer attorney and ended up with 12x the money our snakey partner had offered us. Get a good Attorney. If I had had my attorney in the beginning I would still have my company
 
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