The One Thing Brilliant Start-ups Need To Become Profitable In The Future

When starting a business, the average CEO’s dream is to start, run and grow a profitable business. Oftentimes however, these same CEOs inadvertently sabotage their dreams of growing big. Starting a business can be quite exciting but certain hurdles lie ahead that floats away the initial excitement.

In a short but highly effective book for business owners titled NOT AGAIN; Legal Mistakes entrepreneurs should avoid, how and why, Tosin Omotosho (the author) points out some of these adverse hurdles that business owners must scale to become successful. The hurdles come in various sizes and weights but what they all seek is to pull down businesses.  

Hurdles Start-ups Must Cross

Hurdles come in different sizes, shapes and weights but to pretend they don’t exist is the most important stumbling block start-ups must leap over. As the founder of a start-up, it is very important you sit down and tell yourself the truth. Turning a blind eye won’t make them go away, as a matter of fact, ignoring legal hurdles would only complicate things for you now and in the future.

There are four sides to almost every business. The financial side, the legal side, the marketing side and the human resources side.

While most start-ups focus on three of the four sides leaving out the legal side, the most profitable ones square in on all four sides. Realizing that you must keep your legal slate clean just as much as you must make profit is why most businesses get ahead and reach the finish line while others don’t.

Why You should Avoid Legal Mistakes

When the Montgolfier brothers designed the hot air balloon in the mid 18th century, they understood that the fire that propelled the balloon had to be kept burning in order to keep it afloat. Whenever the fire goes out, the balloon would surely come towards the ground.

Every business is like the balloon that needs to be propelled by the fire that started it. While most business owners understand the importance of registering their businesses, they soon forget about keeping pace with legal requirements once the business kicks off.

How Brilliant Start-ups Take Care of Legal Issues

1.      They Hire a Lawyer

In his book titled Choosing a Lawyer John Allison points out that

what sets lawyers apart from the rest of us is their legal education and training.

Allison further went ahead to describe how lawyers help others to understand the laws that are relevant and how to ensure compliance.

Many founders admit that the role of a lawyer is important to their business, yet, many of these founders consciously neglect the tasks required to properly engage a lawyer.

What you should do if you find out your business needs but lacks a lawyer

The first thing to do is to identify the type of lawyer your business needs, your budget for engaging the lawyer and then find a lawyer who knows very much about the type of business you are building.

2.      They Do The Important Things On Time

There are generally two types of people according to a social research. There are the early doers and the late doers. Depending on which group you belong to, you might be sabotaging your businesses if you have one. For instance if you are the late doer in business, it means you have to pay penalties for tasks that have exceeded their deadlines. This is a serious legal mistake which Omotosho talked about in her book.

For instance, every business is required to pay annual returns, however failure to file the returns at the appropriate time leads to penalties. Penalties can become holes in your pocket through which your business profits leak out.

One thing the late doers always think is that there would never be a time of reckoning but often times we see that this is not true.

Also, the late doers might be able to blame a tight schedule, shortage of staff and capital resources, but eventually, these excuses do not really stick to the wind. One thing you should know is that you can have an arrangement with external solicitors on ways to keep your legal obligations fulfilled on time.

3.      They Constantly Ask For Advise 

The importance of asking for advise before taking crucial steps cannot be rightly overemphasized. Rather than seeking professional help ahead of their actions, what most unsuccessful start-ups do is walk their way into trouble before calling out for help. By doing things this way, start-ups lose a lot of momentum which slows down productivity.

For instance, a production company might be required to obtain a license before starting its operations. Such company may be sealed off for not meeting the legal requirements and would be required to obtain the license and pay penalties.

Successful founders are often honest about their limited knowledge and inability and do not pretend that they know it all. Rather they call on the professionals and seek for effective advise.

4.      They Always Keep Proper Documentations

Every successful start-up never forgets that the faintest ink is better than the sharpest memory. That is why the successful CEOs would show preference for written agreements over oral agreements. In the fight between oral and written agreements, the written agreement would always win. What is written down is usually well defined, structured and can easily be recalled. Written agreements also serves as proof of what the parties agreed upon.

One lesson every start-up can learn from successful companies is the importance of documenting every policy of the business. Successful start-ups usually document their business plans, employee policies, Human Resources Handbooks, Privacy Policy, Web Content Policy, Payment Policy and every other documentation that is required of a business that intends to stick around for quite a long period of time.

Unsuccessful founders love to keep things in their head. They run their business from impulsive thoughts and only focus on making profit rather than building a profitable and successful business.

5.      They Are Honest With Their Taxes

When it comes to payment of taxes for start-ups, not enough can be said as this is the area most often fall short. The beauty of understanding and paying the taxes at the appropriate time is that the start-up pays only what it owes. However, unsuccessful start-ups ignore this rule and delay payment until a need arises.

Penalties are the biggest leaches unsuccessful start-ups must feed. Even when the business is making profit, if it is not fulfilling its legal obligations, one would only conclude that the business is pretending to be successful.

Conclusion

The business world is highly competitive and it takes grit and focus to start and run a successful business especially in any capitalist society. A successful entrepreneur therefore has to keep his eyes on all four walls of his business to ensure that none collapses under his watch.

If you enjoyed reading this article drop a comment or hit the like button below.