Being the boss of your own business is the dream of many. That is also probably the answer to why entrepreneurship arises. However, starting a small business in Singapore involves big risks.
One thing you can do to overcome inevitable risks is by planning and preparing ahead to minimize them. We, Aspire, is also a small business ourselves and we want to share our experience with developing a startup.
Here are the 10 steps to start a small business in Singapore:
1. Ascertain your business idea
First of all, you are here because you have a business idea, that’s great! However, have you examined your ideas thoroughly? This early stage is the best timing to be critical over the viability of your business idea.
- How specific have you gone with your ideas?
- How would you measure your progress and success?
- Have you set milestones and are they achievable?
- Are you providing a solution to customers’ needs?
- What differentiates you from your competitors?
If you have an answer to these questions, then you’re ready to move to the second step!
2. Create a business plan
You don’t have to write a business plan with hundreds of pages. A business plan should not be complicated, especially if you know by heart how you want your business to be.
In our previous blog, we have shared a simple and comprehensive business plan template with hair and beauty salon as the sample. Basically, it should cover these important parts:
- About your business (background, vision, and mission)
- Your business products/services
- Market analysis (customer profile and competitors)
- Operational plan
- Sales Forecast
As your business has not begun to operate, your business plan does not have to be 100% accurate. Providing an estimation will help you get closer to achieving your goals.
3. Work out the financials
Whether or not you are comfortable managing numbers and budgets, this is an important aspect to keep your business running. How will you have access to funds? What are the costs that you will run into?
To start with, there are two kinds of costs that you need to prepare: Capital Cost and Fixed Cost. Capital costs are the one-time amounts that you need to launch your small business, including your materials, any cost to register your business or a website. Fixed costs, on the other hand, are the expenses that you will need to pay whether or not you are earning.
It is also important to know how you would deal with emergency and unexpected expenses.
4. Conceptualize the branding
Here comes the fun part! First, pick a name for your business. Come up with a unique and memorable name that is easier for your future customers to remember. Usually, it is better if the name relates to the business itself.
Keep in mind that the Accounting and Corporate Regulatory Authority (ACRA) does not allow offensive business names. Moreover, check to a corporate service provider, or manually through Bizfile, whether the chosen business name is available for you to use.
So, it’s good to have at least two backup names for your business just in case the first choice is taken or unavailable.
5. Create a website for your business
To be frank, if you want to open a business in Singapore, it will be highly advantageous if you have an online presence. As mentioned in our previous article:
Singapore is known to have one of the fastest internet connection speed in Asia Pacific countries. Everyone is connected to the internet almost every time throughout the day. In fact, 7 out of 10 Singaporeans are active social media users.
Hence, once you have confirmed that your business name is available with ACRA, it is advised to continue with registering a domain name for your business. Your business name might be available with ACRA, but may be taken by someone else as a domain name.
6. Decide the business structure
You will need to consider the requirements as well in setting up your chosen business entity, along with the advantages and disadvantages.
Choose a business structure that is most suitable for you:
- Sole proprietorship: Owned by one person
- Partnership: Owned by 2 to 20 partners
- Limited liability partnership: Owned by at least 2 partners, one general partner, and one limited partner, with no maximum limit in the number of partners
- Limited partnership private: Owned by at least 2 partners with no maximum limit in the number of partners
- Company: Broken-down even further to exempt private company, private company or public company.
To find out the complete comparison of business entities in Singapore, click here!
7. Understand tax obligation matters
It is good to educate yourself about Singapore’s tax obligations for your small business to prevent any legal problems in the future. Where to start? Begin with the basics of Singapore corporate income tax, how to file estimated chargeable income and the important dates you should be aware of.
If you are not confident in handling it by yourself, it is good to ask for assistance from tax experts.
8. Register your office address
Registering an office address is one of the requirements to register your company in Singapore. If your business is a small-scale business and you do your business from home, don’t worry! This does not mean you have to operate your business in an official working space or office building. You may register your private residential property or HDB.
9. Register your business
It’s coming to an end! By now, you should be even more confident for your business to take off. Registering your business with ACRA can be done by yourself or by the help of a professional service provider. The process of company incorporation should not take too long. If your application does not need additional investigation, it may be approved within a day.
For more information on how to register your business with ACRA, click here!
10. Set up a digital presence
This is more of additional advice for you to start a small business in Singapore. Having a strong digital presence would be ideal. It is a more cost-effective alternative compared to traditional marketing practices.
This is specifically useful for small businesses that are constantly challenged to compete with a more established brand. For example, creating, maintaining and observing the progress of social media. If you are still deciding which social media platform to use, we have an article on the best social media platform to advertise your business in Singapore. Go check it out!
There are a lot of things to be done before setting up your small business in Singapore. However, if you stepped with the right foot forward, it will be helpful in the future. Lastly, the Singapore government has provided a lot of resources for small businesses if ever you need help. To find out what is available, head over to What SMEs Need to Know for 2020 – Singapore Fintech Festival 2019
We envision a world where business owners have fast and simple access to the funding they need to grow. That’s why we’re on a mission to re-invent banking for SMEs across Southeast Asia.
Our current product provides SME and startup owners in Singapore with financial flexibility through a line of credit of up to S$150k. Which, can also be used to make business payments to enjoy 60 days free credit terms.