How to resign and run your business full time

Congratulations! You’ve decided to make a full-time commitment to your business.

Before you give your notice and burn bridges your work enemies, remember that your network and relationships are especially important to you as an entrepreneur who is just starting out.

Leave smart.

Testing the waters—To resign or not to resign?

If you are going to be a full-time entrepreneur, you have to make sure you’re financially and legally in the clear

The golden rule before quitting your job is to make sure you have 3-6 months worth of your fixed-income saved up before leaving. If your finances are not in check, you should reconsider resigning.

It is not unusual to start your own business journey while being employed. If you want to keep your “day job” while starting a business, please ensure you’re not violating your employment contract. If in doubt, seek legal counsel and/or inform your current employer about your new venture. 

If your new venture violates any employment contracts, STOP!  You do not want to start your business with a cloud of litigation hovering over you. Click To Tweet

Employers and courts take contractual agreements seriously, so do not call your employer’s bluff.

For example, there was a case in Nigeria where an employee entered into a service contract where he was not to engage in a business similar to the employer’s business within a certain geographical area for one year.

Less than 3 weeks after he started work, he breached the contract by resigning and joining a rival company in the same area. The Nigerian Supreme Court held that contracts that prevent employees from engaging in a similar business as the employer are enforceable as long as the contracts are “reasonable with reference to the interest of the parties concerned and of the public” (Leventis Motors Ltd. v. Andreas Koumoulis (1973) 1 All NLR (Part 2) 144 at 146).

Diving in – Your resignation

Before you resign, review all your employment contracts, if applicable. The contract usually details the resignation procedure, how your resignation must be presented, and the necessary resignation notice period – 2 weeks, 1 month, etc.

It is important that you follow the rules sis! You do not want to expose yourself to unnecessary legal liability by ignoring those words in black and white.  

Secondly, check if you signed a non-compete agreement with your current employer. Will your new venture involve the use of your employer’s proprietary information?

If you did sign one, make sure that the scope of your new venture does not fall within the scope of services your employer offers, and that your new venture will not apply your employer’s proprietary information.

Finally, are you planning to start the new venture with a coworker?

"If starting a new business with a coworker – review all your contracts and your employer’s employment policies carefully! There may be a little something there about poaching…" Click To Tweet

Ensure that you and your co-worker’s departure will not result in a breach of your contract or your employer’s policies. Also, ensure that your potential business partner is not subject to any non-compete agreements and will not be using any proprietary information in the new venture. 

Keep your start-up team in legal tip-top shape.

It is important to dedicate time to thinking through your resignation. There is no point in rushing to the finish line without laying the right foundation.

Got a question? Send a message or voice note to +2349078653509 on Whatsapp anywhere in Africa for our new video advice series – #AskASis.

Contributing Editor: Diana Odero

How to protect your small business from day one

shehive london she leads africa small business

5 key steps to protect your small business from a legal standpoint Click To Tweet

Congratulations on deciding to become a  business owner! Are you wondering what you should be doing to ensure business continuity and profitability?  Below are five key steps you should consider taking, from a legal standpoint, to protect your small business.

1. Determine what permits you require and whether you need to incorporate

– Determine whether to incorporate your business

Most small businesses start off as unregistered businesses or sole proprietorships. The need to incorporate immediately is country specific, as some countries require immediate incorporation for certain business activities.

But, as your business grows, incorporation may be ideal, as it offers many benefits including separate legal entity status

– Determine what licenses, permits or approvals you need.

In addition, you should find out what permits, approvals or licenses you need to start and run your business legally. You can obtain this information by asking contacts in a similar trade or business. You can also reach out to regulatory bodies or organizations that assist small businesses.

Find out what permits or licenses you need to start and run your business legally Click To Tweet

2. Protect your confidential information and intellectual property

–  Protect your intellectual property

Consider registering your intellectual property with the regulatory body in your country, as that is the usually the most effective protection.

–  Register your domain name

With the increasing importance of social media, if you intend to establish a web presence, you should register and secure your domain name as soon as possible.

–  Protect your confidential information

Determine how much information on your business know-how (information peculiar to your business that gives you a competitive advantage) that should be disclosed to third parties.

Before you speak to a lawyer or intellectual property expert, err on the side of caution, by not disclosing or disclosing little, about distinguishing aspects of your business.

–  Sign confidentiality agreements

Sign a confidentiality or non-disclosure agreement with potential investors/ business partners. While this may not always be well received, you should still try.

You can conduct an internet search for websites that offer agreement templates that you can tailor to your needs or ask a lawyer to draft an agreement for you.

3. Pay attention to your contracts

–  Review it

Before you sign an agreement, review it thoroughly. Some useful questions to ask are: What are my rights and obligations? What are the other party’s rights and obligations?

When do each party’s obligations end? Are there any red flags or issues of concern that should be discussed or resolved before signing?

–  Document your understanding

Also, as a best practice, have an agreement for every business relationship. If a dispute arises, an oral agreement would be very difficult to prove. Even if both parties agree on the existence of the contract, they will definitely not agree on the exact details.

But, if a signed contract is not practicable, have a paper or email trail that highlights the important details including your understanding and expectations.

–  Address payment concerns

Payment for services rendered is another common concern. You should, therefore, always inform clients of your fees and timelines before you commence work.

More importantly, know your client’s payment reputation, based on past interactions or market research, it will help you decide whether to do business with them or not.

If a signed contract is not practicable, have a paper trail that highlights important details Click To Tweet

4. Talk to a lawyer

Another way to protect your small business is to seek legal advice on key aspects of your business early on. You can avoid or save on legal fees by asking a skilled lawyer friend for free/discounted legal advice.

If your friend does not practice in that area, they may be able to refer you to another lawyer that can provide premium services at competitive or discounted rates.

5. Monitor your brand

Finally, use the internet to your advantage. Set up Google Alerts. It’s a great way to monitor your brand/business because you get updates any time your brand or business name is mentioned.

I wish you every success in your entrepreneurial journey!

Note: This article is for information purposes only and it should not be used as a substitute for legal advice.