Starting your own business as an entrepreneur is something that many of us dream of. Today, this is not such a far-fetched reality with many achieving success even as solopreneurs.
Since the pandemic reared its head in 2020, we have seen a surge in small businesses worldwide as people adapted to the situation. Singapore has been no exception, with the crisis igniting a new breed of successful entrepreneurs here.
This is not to say that it is easy. Despite a thriving ecosystem of low startup costs, government grants, and support, a sobering 30% of Singaporean startups fail within 3 years.
As exciting as the idea of starting a small business is, there are steps you need to take to reduce risks and increase the chances of success.
6 Key Steps To Start A Small Business In Singapore
Most guides will jump straight into tactics such as researching if your business is viable and writing a business plan. What nobody ever covers, is the mindset you will need as a new business owner.
A key factor is, there comes a time where you just have to put all the research and learning down and start executing.
Strategy and thinking are important. But many entrepreneurs get stuck at that stage of paralysis by analysis, where there is a subconscious barrier holding them back from taking action.
They do not move forward because they do not want to fail, because the route forward is uncertain.
In school, we have been trained to access all the data before making decisions. Hence many get stuck when data is not available. The biggest winners are always those that use the limited data available to make an educated guess.
And after that, it is full steam ahead with just getting things done with no more questions or excuses.
You have to focus on the process and not try to get everything perfect. When building with that in mind, you allow yourself the room to make mistakes and learn from them.
The imperfections of the journey show you where to improve and teach you how to refine.
Learn to be okay with just being okay as you are starting your business, and you will begin to gain the confidence you need to keep pushing forward!
2. Validate your business idea
Coming up with your business idea is one thing, but how do you know if it’s viable in the real world?
Here are a few key questions to ask yourself as a new entrepreneur:
● What is my Unique Selling Proposition (USP)?
● Is there enough demand for what I am trying to sell in my target market, and how big is that market?
● Who else is doing what I am proposing, and are they successful?
● What is my competitive advantage over them? Why will customers choose me instead of the competition?
● Do I have the resources needed to launch my business and sustain it for the long run?
To also validate your business idea quickly, you can consider launching a minimum viable product (MVP) to find whether there is a demand for your product or service.
3. Determine your business model
When entrepreneurs use the term business model, they often mean how the business makes money. However, it is important to understand the difference between your business model and business plan.
Here are 5 common business models you can consider:
1) Coaching – This is where you package information for sale in the form of eBooks, online courses, personal coaching, or masterminds. Examples are stock trading, personal fitness, and business coaches.
2) E-commerce – You sell physical products or digital goods on your website or an e-commerce platform such as Amazon, Shopee, and Carousell.
3) Content creation – You create content on social media platforms such as Instagram or YouTube, build a subscriber base, and monetize it by selling your own products or allowing businesses to advertise to your subscribers.
4) Franchising – This is where the business owner licenses their business model to other people looking to start their own businesses. You follow a proven process with minimal innovation on your part. Examples are brands like Ya Kun, Old Chang Kee, and 7-Eleven.
5) Digital Agency & freelancing – This is one of the fastest and most straightforward ways to start. As a digital agency or freelancer, you sell your services to other businesses as their outsourced help. Common examples are blog writing, programming, and web design.
Take time to determine your business model and see which best suits your goals and business idea.
3. Create a Business Plan
A business plan is a document that outlines the structure of your business, such as its mission statement and core values.
It shows how you will achieve growth, what makes your offer unique, and who it’s for. It also includes financial projections such as revenue forecasts and costs to help you determine whether there is potential profit in starting this business idea!
Choose a business plan format that works for you
There is no right or wrong way to write a business plan. What is important is that your plan meets your needs.
Most business plans fall into either a traditional or lean format. Traditional business plans have a standard structure, in-depth detail, and are dozens of pages long. They tend to require a lot of time and resources, which is why lean business plans are gaining popularity.
A lean business plan only has the most important sections such as your business model, financial projections, marketing strategies, and key takeaways. It is a concise document that highlights what you are passionate about – saving more entrepreneurs from wasting hours writing unnecessary content!
For example, you do not have to spend weeks writing a traditional business plan if you are just planning to freelance.
Lean plans are generally sufficient for a small business. These are the main points to create a lean business plan are:
● Key partnerships – Keep in mind the other organizations or services you will deal with to run your organization. Think about distributors, producers, subcontractors, and similar partners.
● Business activity – List the ways your organization will acquire a competitive advantage. Highlight points like cutting out intermediaries for cost savings or making use of technology to tap into the sharing economic climate.
● Key resources – Detail any kind of resource you will utilize to develop worth for your customer. Your crucial properties could consist of a team, proprietary knowledge, or copyright assets.
● Your offer – Create an offer for your product or service that is so good people will feel stupid saying no.
● Marketing plan – This outlines your strategy on how and where you plan to acquire customers from.
● Financial plan – This section contains information regarding finances such as your start-up costs, how the funds will be used, and ongoing expenses such as salaries, marketing, and software expenses.
● Operational plan – This should contain details on how you intend to achieve your business goals daily, such as customer support and logistics.
4. How to choose your business structure & register your business
In Singapore, there are 4 main types of business structures to choose from.
● Sole-Proprietorship (one owner) or Partnership (two or more owners)
● Limited Partnership (LP)
● Limited Liability Partnership (LLP)
● Company (Pte. Ltd.)
To choose the business structure that suits you best, research each option carefully. Do note that there are different accounting and tax obligations for different structures. You can find out more about them here.
Once you have chosen, you can register your business on ACRA’s website yourself or hire a firm to advise and set everything up for you. There are many firms that specialise in company registration and incorporation.
5. Office Administration
This involves everything from registering an office address, managing your accounting, taxes to registering business bank accounts and how to invoice your customers.
For small business accounting, you can develop your own bookkeeping system in excel or use accounting software. There are many free and paid versions for you to choose from, or you can hire an accountant if necessary.
For taxes, do educate yourself on your tax obligations to avoid any late fees or penalties. The Inland Revenue Authority of Singapore’s website is a great place to start.
One good point to know is that many firms who can incorporate your company can also advise or do all the above for you.
You will also need a system to invoice customers and get paid on time. Friz is an online financial solution where entrepreneurs can issue invoices, get paid in advance on invoices sent, and much more.
6. Create A Digital Presence
Nowadays, having an online presence is essential to any business even if you are selling your products offline.
A website is a basic requirement, which you can create with free drag-and-drop website builders or hire someone to build it.
Other than a website, another option is to create a social media page for your brand on Facebook or Instagram and monitor your engagement, sales, and reviews along the way.
Create a Google My Business (GMB) profile. This is important because it allows customers to rate your business and read reviews on Google Maps. It also helps you appear higher up in searches for local businesses, which will help drive more traffic to your website or social media page!
And those are the steps to launching your own business! This is where your marketing plan now starts to drive traffic to acquire leads and sales.
We hope this was useful, you can also read our blog for other great articles on business and freelancing.