For someone whose dream to be an entrepreneur—especially in a business environment as exciting as Singapore’s—the idea might be a glamorous one. In your mind, you may be able to picture yourself doing work that you’re truly passionate about, partnering with people and organizations that you trust and look up to, and making a mark on the world. But everyone who goes through the rite of passage of opening a business will soon discover that it’s not for everybody, and that certain things have to work in your favour in order for you to truly succeed.
How will you know that it’s a good time to consider starting a small business in Singapore? For those who are willing to go through both the joys and the growing pains of becoming an entrepreneur, here are 6 good signs that the time is ripe.
You’re 100% Sure About Pursuing the Entrepreneurial Life
The first indicator that you may be ready to start your own business is that your decision coincides with important breakthroughs in your life. Perhaps you’ve already run the gamut in your corporate life and learned all the things you needed to. Or perhaps the people around you have encouraged you to start a business based on how successful you’ve become at nurturing a particular talent or hobby.
One thing’s for certain: you have to be 100% sure about taking this huge new step, and your life circumstances should align with your decision. Running a business is not easy; it takes passion, grit, and the courage to take on risks and potentially deal with failure. Not only are you required to work hard (which you would need to do at any other job all the same)—you are also in charge of building something completely new and filling in people’s needs in a way that hasn’t been done before.
If these challenges excite you more than they scare you—and most importantly, you feel ready to take them on—then it may be a sign that it’s time for you to explore the entrepreneurial life.
You’ve Acquired Enough Experience to Start a Business
Experience is not a prerequisite for starting a business, but it would contribute tremendously to the successful launch of your new endeavour. For example, if your intent is to start a business that offers boutique management consultancy services, you should have acquired sufficient management experience from your previous jobs. This is so that you can speak from a position of authority when dispensing the advice and feedback that your clients need.
On the other hand, if you want to launch a niche product—for example a sporting good or your own line of fashion apparel—you’ll have great chances of succeeding if you’re an athlete yourself or if you’ve been a long-time follower of the fashion industry. That experience will allow you to run your business model with deeper insight on what your customers want from your brand.
Do you feel like you’ve gleaned enough valuable experience to lead a business? If the answer is yes, then you may be ready to turn your passion and expertise into a full-fledged business venture.
You Have the Necessary Capital That It Takes to Start a Business
It’s no secret that it can take a significant amount of money to run a business. You’ll need a sufficient amount of working capital to buy raw and finished goods, secure labour, rent property, and fulfil other tasks related to business operations.
Exactly how much capital you’ll need depends on factors like your business structure and the nature of your products or services. The actual amount may also differ per month or per quarter depending on when your business expects to make its strongest sales, for example during seasonal holidays.
Do you have enough money to cover basics like overhead, plus a little more to serve as your safety net? If so—and if you can trust yourself and your business partners to maximise your capital with good budget management practices—then you can be confident about starting a business.
You’ve Settled on an Ideal Business Structure
If you want to open a business in Singapore, you will need to register it under one of the following business structures:
As a Business
This is the simplest arrangement among the four. Under this structure, your business can involve sole proprietorship consisting of one owner or shared partnership between 2 and 20 business owners. You and/or your business partners will be responsible for its debts and losses, over which you have unlimited personal liability.
As a Company
Entities that fall under the company structure in Singapore consist of shareholders who each have limited liability. This means that they are not personally liable for the company’s debts and losses.
As a Limited Partnership (LP)
In a limited partnership structure, there should be one general partner and one limited partner. The former will be personally liable for debts and losses, while the latter has only limited liability over the same.
As a Limited Liability Partnership (LLP)
A limited liability partnership, on the other hand, entails a minimum of 2 partners. Each of them will have limited liability.
Your choice of a business structure depends on whether you’d like to own the business alone or with others, or how much financing you’re willing to put up for your business versus how much others involved are willing to contribute. If you have a solid answer for how you envision ownership of the business to be like, then you can be trusted with the responsibility of opening one.
You’ve Done a Survey of Your Market in Singapore
No business owner should go into their new venture without sufficient knowledge of their intended market. Well before you start a business, you must do adequate research about the demographics of your chosen market, what its needs are, and what trends currently prevail.
It’s also important to contextualise your business operations to the Singaporean market and to take note of how the country’s market may differ from other regional or global markets. You must also be able to learn how the different Singaporean industries operate in tandem with each other.
Do you have enough insight on your market to be assured of a successful opening? Once you feel like you’ve learned everything you need to, it’ll be a good time to put your theories about your business into practice.
You’re Ready to Apply for All the Key Business Registration Requirements
The last sign pertains to your readiness to go through some of the most tedious tasks related to opening a business: navigating through the paperwork. Attending to all your pre-registration and post-registration requirements will take up time and energy on your part. You will have the highest chance of a smooth business opening if you follow all the requirements to the letter.
First, your business venture will need to fulfil the minimum requirements in Singapore. The chief business owner must be at least 18 years old, and at least one person per business identity must reside in Singapore. In addition, under the business, LP, and LLP structures, the owner’s and partners’ Medisave accounts with Singapore’s Central Provident Fund Board (CPFB) must be paid up at all times. (Also check this CPF calculator for singapore citizens)
Are you fully equipped to comply with all of Singapore’s business registration requirements? If so, then you’ll be ready to go for it.
Opening a business in Singapore will be an eventful journey for you and your partners. If you read the signs right, you’ll be able to set a good precedent for your eventual success. Here’s to following through on your passion project and being able to leave an impact on your Singaporean market in the years to come!