When Employees Become the Competition

By Mikal E. Belicove|For Entrepreneur.com|May 31, 2012

While traveling in Pennsylvania recently, I stopped off in Pittsburgh to visit Nick Vacco, a serial entrepreneur.

Vacco’s 13-year-old company, Detail King, is an auto-detailer training company. Vacco got his start in college when he ran an auto-detailing business out of the trunk of his car.

While touring his training facility, I overheard a student from Tampa, Fla., ask Vacco how to get past a concern she has about hiring and training employees, sensing that some will turn around and run their own auto-detailing business in direct competition with hers.

It’s a good question, and Nick had a number of thoughts on it worth sharing:

Paranoia will destroy ya: Don’t assume that a job applicant wants anything more than just a job. Otherwise, you’re operating from a position of paranoia, Vacco says, and you can’t run a business from a standpoint of fear. Besides, if you insist on hiring people with no ambition, good luck with that. It’ll be reflected in every task they do.

Related: Noncompete Expired, a Serial Entrepreneur Seeks Repeat Success

Use a noncompete agreement: You could ask new hires to sign a noncompete agreement, and if your state enforces such agreements, you can make signing one a nonnegotiable condition for working at your business. But check with a lawyer first, because holding an employee to it can be a balancing act between an employer’s right to protect her own interests and a worker’s right to set up his own shop.

Listen carefully during the interview: You want to hire the right people — people ready to get down to work, not people looking to start their own business. Ask prospective employees…

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