Decided to start your very own business? That is an admirable goal, considering how hard it is to be a small business owner in Singapore, due to our high cost of living. We’re sure starting your own business is confusing and intimidating, but it is normal to feel overwhelmed. This guide aims to help potential entrepreneurs navigate the complex world of business, so that anyone can achieve their goal of owning a successful start up.
There are a multitude of things to consider when starting a business, so we’ll start by breaking it down into steps. Do take note that this is simply a guide, and not a strict set of instructions.
Type Of Business Structure
One of the first things you will need to consider is whether you are going into the business alone, or with a partner. You need this to know what kind of structure your start up will have. Here is a brief overview of the five main types of business structures in Singapore.
|Sole-Proprietorship||Partnership||Limited Partnership||Limited Liability Partnership||Company|
|Owned by||1 person||2-20 people||2 or more people, at least 1 general partner and 1 limited partner||2 or more people||1. Exempt Private Company – 20 individual shareholders or less|
2. Private Company – 50 shareholders or less
3. Public Company – More than 50 shareholders
|Liability||Unlimited||Unlimited||General partner –> Unlimited |
Limited partner –> Limited
|Taxes||Profits taxed at owner’s Personal Income Tax (PIT) rates||Partner’s PIT rates||Partner’s PIT rates (if individual), corporate tax rates (if corporation)||Partner’s PIT rates (if individual), corporate tax rates (if corporation)||Corporate tax rates|
All five business structures have different regulations and restrictions, so it is important to do sufficient research to be sure which best suits you. Lending restrictions for banks and private lenders also differ from business structure to business structure, so you should consider this too. For example, Poss is only able to lend to limited liability partnerships and exempt private companies. Hence, it is good to consider all future possibilities before choosing your business structure. You can visit ACRA’s website for a more comprehensive view of the rules and regulations of each business structure.
Type Of Industry
Now that you have determined your business structure, let’s move on to the type of industry your start up will be in. You should already have an idea of which industry you will be exploring. With this in mind, you need to do copious amounts of research into the requirements of your desired industry.
For example, if you are opening a hawker stall, you will have to pass a Basic Food Hygiene Course (BFHC), and submit a tender bid to operate the stall. On the other hand, you may have to submit an application to ACRA, if you want to start an accounting firm, depending on the type of accounting business structure you have.
Of course, this is simply a very brief overview of the licenses you may require. The best way to avoid getting into trouble before your business has even started is to do proper research. Ask industry professionals for advice, or call up the relevant authorities to find out what to do next. It is much better to be safe than sorry.
Start Up Business Plan
As the saying goes, if you fail to plan, you plan to fail. This goes for starting a new business as well. It is vital to have a clear business plan in place to give you direction and goals. Your business plan should include your objectives, strategies, target market and financial projections. This is crucial because hitting milestones can motivate and push you, giving you a sense of accomplishment. It reduces the chance of you overlooking anything, and proves to potential investors that you are serious about your start up.
Marketing for a Start Up
Advertising is essential for the success of any start up. What you need to consider is how much you should lean on digital marketing as opposed to traditional marketing. Will your start up benefit from advertising on social media platforms? Should you have your own website? In the digital age, it seems that the answer to these questions should be a resounding ‘yes’, but this actually depends on your target audience.
If you are targeting the older generation, then social media may not be the way to go. You should consider other more traditional forms of advertising, like radio or TV commercials. Of course, if your target audience is students or working adults, then social media marketing will do wonders for your business. Essentially, you need to properly analyse your target audience, to understand the best possible way to reach out to them.
Start Up Funding
The perennial problem of small businesses is the lack of funding. While there are many funding options out there, such as banks, not all of them are willing to lend to SMEs. In this case, government grants are a good source of funding, such as the Productivity Solutions Grant (PSG), which helps companies automate their processes through technology. Private lenders are also worth looking into. For more information on the different sources of funding available for SMEs, you can look at our previous article.
Sooner or later, you will have to hire employees in order to keep up with your startup’s operations. However, start-ups often struggle to attract talent, as they are unable to offer high salaries. Luckily, there are other ways to attract new staff. For a more comprehensive idea of how to hire and retain talent, take a look at our talent attraction article.
With these steps, you should have a better idea of how to get started with your business. For a more in-depth guide, you can look at ACRA’s guide to setting up a local company. Starting a new business is extremely difficult. However, as long as you do the necessary research and abide by the laws, you should be able to get your business up and running in no time. Good luck!