Being your own boss is a dream many people have. One of the many perks of starting your own business or start-up is fulfilling said dream. Unfortunately it is a dream that comes with many responsibilities and without proper preparation entrepreneurs become trapped in “legal snares”.
Many of these “legal snares” can be avoided or dealt with swiftly leaving minimal damage, but that depends on the entrepreneur being properly prepared. To assist with this preparation, we have compiled a list of tips for a successful start-up.
1. The Business Plan
Planning for a business before starting one is an exceptionally obvious and some what boring step. But sometimes the obvious is quickly and dangerously ignored.
A business plan should include the short term and long term goals of the business. Don’t be vague; include anything and everything you deem important to your business, a few suggestions are:
- Financing
- Capital structure
- Target market or customer base
- Suppliers
- Staffing
- Exit strategies (it’s not about being pessimistic, it’s about being realistic)
2. Memorandum of Incorporation (MOI)
The MOI of a business can, in a nutshell, be defined as the constitution of a business. This ultra-important document can make a start-up a Houdini in many of those pesky “legal snares”. How? Well, as the founding document of a company, the MOI sets out the rights, duties and responsibilities of the shareholders, directors, employees and any other person associated with the company.
3. Think Contracts
When running a start-up MAKE sure you have contracts in place with your suppliers, your employees and customers. If a customer fails to pay or a supplier fails to deliver these treasures can save your business money and save you from a lot of stress!
4. Know the basic laws
In South Africa, in particular, knowing the basics of the following, to name a few, will help with the smooth running of your business:
- Labour Laws
- Consumer Protection Laws
- Laws regulating Data Protection such as Protection Of Personal Information Act
- Intellectual Property Laws
- Tax Laws
5. Get an Accountant or Bookkeeper
Keeping a company finances in order is essential for any business. Make sure you review your books with your accountant or bookkeeper so that you understand where your business is financially.
6. Insurance
Protect all your hard work by making sure you have the correct insurance for Business. Speak to your broker.
7. Keep it clean
In today’s fast pace life, filing is often the last item on our to-do lists. However, by keeping your filing up to date, you save yourself stress and a lot of time.
Although these tips in no way ensure the complete success of the start-up, if followed, they can assist in preventing the start-up being bogged down with legal issues.
Sources:
Ibid
FHI Cassim et al ‘The Law of Business Structures’ (2012) p112
