Whether you’re starting-up, managing an existing business, or growing to the next level, you need to know these three facts and how it influences your path to success as a businessperson.
For many entrepreneurs, considering the legal aspects of business is something hardly ever thought about, never mind spoken about. The simple truth is that there is a stigma around the legal side of things.
Some of these stigmas include complex issues and lawyers, who can be unapproachable and expensive. Even with assistance, the legal landscape is difficult to navigate and time consuming. So, many SMEs and entrepreneurs decide to follow a dangerous ‘look the other way’ or ‘bury head in the sand’ approach.
On the other hand, some do brave it – completely on their own. This is truly unfortunate, because ultimately it is the longevity of the business that suffers. Here is our best practice share, to kick off a legally healthier year:
1. Avoid a diagnostic or self-medication aided only by Dr Google
Internet research is tremendously useful in order to form a basic idea, or even as a starting point in preparation for a consultation with any expert professional, but should not be consulted in isolation.
Related: 3 Things you should know about POPI
The fact remains, a lot of the search results are not locally relevant, up to date, or are not from reputable sources. At the end of the day, you could end up with a proverbial self-diagnosis of polio when you actually just sprained a muscle.
Similarly, any document or template readily available on the internet may not fit your purpose in the slightest and may end up doing more harm than good. Professionally identified needs, drafts and purpose-made documents are therefore always recommended best practice.
2. Finding the ‘right fit’ attorney is paramount
An attorney, as a professional advisor, will advise you on your most precious creation – your business. Therefore, the decision in who you will not only place your trust, but your confidence, is as an important decision as taking the entrepreneurial leap or choosing the right care giver for your 4-month old baby.
It is therefore a matter of trust and compromise. Ensure that the attorney you intend to use gains your trust and that your decision to use him or her is not only based on the fact that he or she is familiar or that you are comfortable with each other. So, your sister or brother-in-law may not be the best fit. It is important that he or she has the required skills and expertise. For instance, if you own a construction business, it would be good to look for a firm with both commercial and construction law experience.
3. Know your risk
In my view, the single most important consideration is knowing your risks. Not ‘guesstimating’, but really knowing. In other words, how safe is your business from life’s unexpected occurrences? Have you put measures in place to avoid or limit your risk most effectively?
It is key to understand which regulations are applicable to, or affect your business or industry and which measures should be put in place. For example, are you required to hold a trading license, if so – what are the requirements? Should it be revoked, how will that impact you?
Related: Significant legal changes affecting your business
Or have you assessed the risk posed by human capital? In other words, how do you recruit employees? What do you spend on training or integrating them into your organisation? Where is the break-even on your investment? What will you do if your investment yields no return or a loss? Will you even realise when this happens?
The concept of risk is therefore much broader than the expected risks, which insurance products can address. An effective mechanism to identify, address and manage risk is therefore imperative for all businesses.
Entrepreneurs should face legal challenges head-on by consulting with a team of qualified professionals from the start. Build a relationship with a firm starting early on and evolve the advice, support and legal work your business needs, as the need arises.