I always like to say that one of the secrets of success is informed decision making. Information is a powerful tool, entire dynasties have been built based on the proper use of information. An entrepreneur needs to know what he doesn’t know and what he does know in order to make a good and informed decision. The question is how do you find out that you don’t know?
The answer is simple – proper consultation! I recently completed the Hustle Bootcamp which was a boot camp for entrepreneurs organized by Dotun Olowoporoku. The course enlightened me on the different hurdles an entrepreneur must cross in order to establish a viable business. When I considered all that an SME had to deal with in regard to marketing, pitching, finding investors, creating a scalable business model and building the right team, I realized that entrepreneurs in Nigeria and all over the world, truly have their work cut out for them.
The SME needs legal services but because of the competing needs for limited resources is forced to ‘do it themselves’, rely on online templates or pay quacks to help them get it done. Many an entrepreneur, in a bid to register their limited liability company for N50,000, have fallen victims of unskilled persons preparing memorandums of association that truly are unsuitable to their businesses. They reveal confidential information without proper non – disclosure agreements. Some actually believe that there is a non – disclosure agreement that can bind a person not to disclose information in perpetuity. No such binding document exists in Nigeria. They hire workers who work without any terms of engagement and end up stealing their trade secrets and starting similar businesses.
The saddest event I see is when friends who go into business together turn to enemies because they failed to engage a lawyer to prepare a partnership agreement and force them to agree in advance on exactly how the business would run, money would be shared and so on. I can share countless examples of entrepreneurs who have made poor choices all because they did not appreciate the need to consult and seek proper legal advice.
I don’t want you to fall into this class of SME owner or entrepreneur and so in this article, I am going to share a few tips on what you need when you are starting your business:
- If you have partners have a partnership agreement: I know you have been friends for 12 years with Bola and nothing can come between you guys. If this is true, the more reason why you should both be easily able to sign a partnership agreement. A good partnership agreement is more than a page long. It makes you think about the bank account where money made from the business is kept, the sharing formula, how business property is kept, how business decisions are made, options open to a partner that wants to leave and much more.
- Let your employees have an employment contract: Trust is not cheap and when you hire someone new, you should not be so willing to believe the person is a ‘good person’ whose only dream in life is to help you achieve yours. People will be people and the only way to prepare to deal with these people is by adequate documentation. Let it be clear what the terms of engagement are, what you expect and your expectations even after they leave your employment.
- Penny wise and Pound Foolish: I know you are tempted to patronise that dodgy man standing in front of the Corporate Affairs Commission or the Trademark registry who is offering you rock bottom prices. My advice to you is simply don’t. That man is not a lawyer, and he doesn’t understand classes of trademark. I once met an entrepreneur who in a bid to pay just N50,000 (It seems 50k is the going rate nowadays) for his trademark registration got his trademark for alcoholic drinks registered in the non – alcoholic class *sigh*.
- Get a legal opinion on the ‘legal stuff’ you need for your business and make plans to comply: When you want to start your business, try to get a lawyer to give you an idea of all the legal stuff you need. Are there special laws you need to comply with? Do you need special contracts or additional protection under the law? At least you will know and decide how to plan your next steps.
When I completed the hustle bootcamp, I realised that the kinds of specialised assistance an entrepreneur needs are often out of his grasp as legal fees can be quite high for an adequately skilled lawyer. This is why I set out to help 1000 SME’s set up with renilegal.com It is not a law firm, it is just a law business that connects you to the legal services you need at rates and agreements that you can pay. Even where a start up has little to no money, it can connect you with legal partners who for shares in business would be willing to cover the legal elements of your business.
At the end of the day, I want to celebrate every business owner that is putting in the extra hours and hustling to make their business great. I wish you all the best, hope my advice has helped and thank you so much for reading.
Morenike Okebu graduated from the University of Sheffield at the top of her class and completed the Nigerian Law School, she worked for several years in a law firm in Nigeria and has set out to help 1000 SME’s with her law business: www.renilegal.com. She is also a partner in the law firm of GM George – Taylor & Co.