In Africa today there are a lot of issues facing small to medium enterprises (SMEs). One of the main issues is getting a suitable place to locate their business. If you own a start-up or SME you may choose to operate from home to reduce costs but there are other options available such as renting a space for your company, sharing a space with another business or purchasing a space for the purposes of your business.
Renting a Space
If you want to rent a space to operate your business, there are a few things you have to bear in mind:
- The space should be slated to be for commercial use. You should look out to ensure that the space you want to rent can actually legally be used for commercial purposes in order to prevent having issues with the Ministry of Urban and Regional Planning.
- You should also ensure that you are renting the space directly from the owner of the property. You can engage the services of a lawyer to carry out a search at the land registry to help you confirm this. I always advise that payment of rent is made into the account of the landlord directly and any agency and legal fees are paid to the agent and lawyer separately.
- Finally you need to review your lease agreement carefully. Get a lawyer to check the clauses in the agreement and ensure you are covered. If you need to hang a banner or put up signage for your business, your agreement must permit you to do so. If your business involves clients coming over and parking their cars, there should be adequate arrangements made for parking space and so on.
Time would not allow me discuss all the legal considerations you need to bear in mind within this short article but these three tips if taken into consideration would help prevent you from making mistakes.
Shared office space
I love the idea of a shared space and I believe it is a great idea for businesses who want to reduce their costs yet have an office. In a shared office space, you may share more than an office, both companies may use one receptionist and split the salary and so on. However, there are a few things you need to take into consideration before getting a shared office space:
- Make sure the person you are subletting the property from has the authority to sublet the property under the head lease. One of the first documents you would need to see before agreeing to share a rented space with someone is their title to the property, it could be a tenancy agreement or a lease agreement for example. You need to look out for the conditions of sub – lease. A good lawyer should be able to advise you on the clauses contained there.
- Review the office sharing agreement: one of the reasons people have issues in shared office spaces is that the terms of combined use are not clearly spelt out. You need to have it clearly stated:
- Who pays for what and when?
- Who pays for and organises waste disposal, electricity bills, water bills, local government taxes?
- How are costs shared where emergency measures must be taken for light or water?
- Who covers repair bills and chooses the workman?
These are just a few of the issues you need to bear in mind to prepare the space sharing agreement. If you have been given one already, were these issues taken into account? You should get good lawyer to help you ensure that all your T’s are crossed and your i’s are dotted.
If you are buying a property to use to do business for your SME or StartUp, congratulations, you are in the top 1% of many start-ups and would save a lot on rent. However, before you buy land in Nigeria, there are a couple of tips that would help you if you bore them in mind:
- Get a property that has been designated for commercial use so you wouldn’t have any issues with the Ministry of Urban and Regional Planning.
- If the building has been constructed, ensure that it complies with the building planning approval that was given by the government.
- Carry out a search at the appropriate registry. I can give you a hint, searching the land registry is not enough.
- Ensure a lawyer reviews your agreement before you pay or sign on the dotted line.
In this article I have just given you a few tips that should help you as an SME make good decisions on renting, sharing or buying office space. I am always an advocate for doing things right if they must be done at all. I advise you always engage the services of a good lawyer before engaging in these transactions in order to save yourself from fraud and unnecessary hardship.
Image:Park Commercial Real Estate Inc.
Morenike Okebu is a qualified Legal Practitioner that graduated from the University of Sheffield at the top of her class. She has several years of experience practicing in leading law firm owned by a Senior Advocate of Nigeria and now owns her own business which focuses on solving the legal problems facing SMES and Start-ups.
SMEs: Avoiding the legal pitfalls of giving away goods and services on credit
Image credit: entertainment malawi
A lot of businesses have experienced hard times in the current economic climate. Conversely, the business of some SMEs is booming now more than ever before. The issue I want to write about today is related to managing success and covers some legal issues which come to play when an SME is giving services and goods away on credit.
Giving goods and services away on credit simply means selling goods and services to third parties while they defer payment. It can be an outright deferred payment which can be stated in a contract or receipt or a less obvious form of deferred payment in the form of a post dated cheque. When a business starts accepting transactions like this they are open to a lot of risks and the most notable risk is what if the creditor does not pay?
It is therefore imperative that before an SME gives away goods on credit, the SME fully understands the debt collection process in their country. What remedies would be available if the creditor defaults in payment? The answer to this question differs from country to country but usually the options are:
- Filing a court case against the creditor
- Reporting the creditor to the police
- Reporting the creditor to his professional organisation
When you are thinking of deferring payment, you ought to make amount to be paid on the later date higher than the payment to be made if payment was made instantly: This is because you must ensure that in case payment is not made on the due date, you have charged enough in your deferred payment sum to cover hiring a lawyer to help you get your money back or cover your administrative costs when taking options 2 and 3.
You should also take into consideration the time it would take to exercise any of your debt collection options. Our firm GM George Taylor & Co. specialises in debt collection and we have observed that even in the simplest of cases it can take 1-2 months to recover your money. The question for you SME owner is can you afford an additional delay of 2 months after the deferred date to get your money for the goods you gave away on credit? If the answer is no, then you should not be giving away goods on credit.
Another thing to bear in mind is that where the creditor does not pay, you will need to pay someone to help you get your money back. Apart from any recovery percentage you agree to, you would need to initially pay some money. Can you afford to do that? Before you give away any good or services on credit you need to have this in mind. Only give away sums that you can comfortably afford to recover if need be, the hard way.
Specially drafted contracts by a qualified lawyer will also ease recovering your money if the creditor does not pay. The contracts can create new remedies not listed above which may enable you get your money back faster if the payment is not made at the right date. In summary, even where you are excited for big business as an SME please be careful when giving away goods and services on credit and ensure that you only do so where you can truly afford to do so. Don’t hang your entire business on the promise of a creditor without fully appreciating the debt recovery options available to you. Finally, as I always say, get good legal advice.
Morenike Okebu is the founder of Reni Legal, a law business focused on connecting SMES with high quality legal services they can afford. She is also a partner in GM George Taylor & Co. a full service law firm which specialises in debt recovery. She graduated top of her class at the University of Sheffield and has since then undergone professional training at the University of Southampton, World Intellectual Property Organisation Academy and Harvard University she practiced for years at a tier 1 law firm belonging to an SAN before taking on her current roles..
She hosts free legal awareness seminars for SMES every month. If you would like to attend one of these classes or have any further questions about debt recovery, please send an email to [email protected]
Legal Marketing 101
Vector round web banner of judiciary service. Modern thin line icons in three colors. Big white letter LAW and icons of scales, courthouse, attorney, jury and prison on a black chalkboard(Image: Demoflick)
A lot of practicing lawyers often do not pay attention to the business development aspect of running their firm. Nowadays, It is no longer sufficient to set up a law firm with a small and modest sign board, and then expect clients to somehow find you. It now takes a lot more than that to let clients know you exist and will do an excellent job. As a lawyer, legal marketing entails connecting with your prospective clients on their terms, earning their trust and having them see you as someone who can help them when they need help.
Legal Marketing is a broad term that refers to practices such as client relations, public relations, networking, participation in professional organizations, etc. It generally includes business development activities and efforts to build the brand of your firm and win more clients, thus increasing revenue.
WHAT A LAWYER SHOULD KNOW ABOUT MARKETING
A lawyer doesn’t have to be a sales expert, naturally outgoing, or excessively charming. Instead, growing a law firm starts with a strong marketing plan that uses successful strategies targeted at the right audience and performed consistently. While you may not see results overnight, given time, new clients will be calling up your office. The more transparent your marketing efforts, the clearer it is about the type of cases and clients you want.
Some of the mistakes made in legal marketing include:
- Marketing for general practice
- Not sure of your target clients
- Not paying attention to marketing analytics and results
- Not conveying a clear marketing message
- Poor website design and social media presence
- Trying to do everything at once
- Ignoring the world of mobile technology
Some tips for legal marketing:
- Know your target clients
- Being active on social media is a must!
- Attend bar association events.
- Create a blog for your website and add new content on a regular basis
- Give away free resources in your community to connect with individuals and professionals you may not be able to meet otherwise.
Running a law firm is running a business. Your clients are your customers, and you need customers to remain in business. A lawyer can’t exist without clients and clients can’t find you if they don’t know you are in practice.
Founder Techlawyered | Technology Lawyer | LegalTech Advocate | Software Developer
SMEs: Carefully Navigating The Loan Agreement
Morenike Okebu, Founder at Reni Legal
If you are an SME owner and you are thinking of taking a loan from a commercial bank, you should read this informative article focusing on the key terms to negotiate. It is necessary to read any legal document before signing it, but reading is not enough, you may have to take things a step further by negotiating the terms to better suit your interest.
One of the documents that most Small to Medium Enterprises (SMEs) will come in contact with is a loan agreement. In many cases, these agreements will come from financial institutions and would be largely non – negotiable. While this is often the case, this is not always the case. Before you get a loan from any commercial institution it is fundamental that you try to negotiate the key terms. Before you sign any legal document, I would always advise that you contact a lawyer; the lawyer should review the agreement and explain to you exactly what you are getting into.
Having said that there are some key terms that you should focus on in any loan agreement.
1. The time frame for repayment: Ensure that you understand and can see clearly spelt out the time frame within which you must repay the amount that you have borrowed. If you have discussed one thing with your bankers, and another thing is reflected in the document, this is a BIG deal. The bankers you negotiated with today may lose their jobs and all your oral assurances may go with them, but you will remain bound by your written agreement.
2. The time frame for demand of late payments: I remember reviewing a loan agreement for a client and the time frame for demanding for late payment was only one week. This was ridiculous, according to the agreement if he missed paying an instalment by one week, the entire sum of money advanced to him would become immediately recoverable and the security he provided would be lost. Ensure you get a fair amount of time. At least a month is reasonable.
3. Waivers of your legal rights: You will find that in many loan agreements, the bank will urge you to waive rights you have under the Conveyancing Act or Property and Conveyancing Law. Kindly consult your lawyer and see how you can waive as few rights as possible.
4. Rights to direct debit unrelated accounts: Watch out for any clauses giving the bank the right to debit accounts that are unrelated to the loan transaction which you or other directors in your company may have in the same bank.
I could write a book about some of the outrageous and unfair clauses included in some of the standard form loan agreements in circulation today. You should obviously pay attention to what happens if you do not timeously repay the loan for example, insurance obligations and so on. Regardless of how desperate you may be for funding, you do not want to do anything that would be counter – productive to your business. Therefore it is important that you negotiate and review your loan agreements properly. If you do it NOW, you will thank me about this later.
If you have questions about loan agreements and how they are reviewed, you can always contact me. An SME owner needs all the legal help they can get to prevent and avoid mistakes and costly litigation.
Morenike Okebu is a qualified Legal Practitioner that graduated from the University of Sheffield at the top of her class. She has several years of experience practicing in leading law firm owned by a Senior Advocate of Nigeria and now is a partner in a law firm GM George – Taylor & Co. which powers her own business, Reni Legal. A law business which focuses on uniquely solving the legal problems facing SMEs and Start-ups. Send an email to [email protected] and she will be in touch.
- Business Home2 days ago
Cars45 Expands to Ghana and Kenya
- Technology2 days ago
Google partner migration group to digitally skill up Nigerian returnees
- NGOs - SDGs2 days ago
Promoting Governance And Anti-Corruption In The Energy Sector
- Business Home19 hours ago
ACP Business Summit: Improve the Business Environment to Drive Industrialisation in African, Caribbean and Pacific Countries – Elumelu