Starting a business, especially amid an ongoing pandemic, involves significant financial risks. Since you may be investing a considerable part of your savings or getting a loan for this, you may incur substantial losses if the business fails. Thus, starting a new business, especially on your own, is a big leap of faith for new entrepreneurs.
Often, passion and financial comfort are the main reasons for committing to a business. After all, having your own business has several benefits over being employed for salary. You get to be the boss, manage your time, and reap better financial rewards.
While all businesses have their challenges, these should not scare you away from your dreams. If you want to how to start a small business in Singapore and explore business opportunities in Singapore but don’t know where to start, this post is for you.
What are the Pros and Cons of Starting Your Own Business?
Starting your own business can be a tough decision, and most business also has their highs and lows. Yet, if you have an excellent business idea and want to give it a try, here is a list of pros and cons to consider.
Pros
Having your own business can be rewarding as there are many benefits, such as
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You get to control your schedule.
The first stages of building your business may be busy. Yet, eventually, you get to have a flexible schedule as you learn the business well and delegate some tasks.
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You are the boss.
Owning the business makes you the boss, and everything about the business will be in your hands. Your responsibilities will include decision-making, delegating, and building the business from the ground up. These duties may not sound easy, but ultimately having a small business could mean independence as you get to play by your own rules and terms.
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You get to live your passion.
Getting to live your passion will bring excitement to your everyday work. You’ll get to follow what you think matters most, and being the vision behind your work will bring satisfaction. Plus, there is also prestige and pride in being able to do and put into business what you love.
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You can work from anywhere.
This benefit may not be accurate for all kinds of business, especially if you are a hands-on manager. However, many business owners nowadays prefer to work from home or anywhere, knowing that they can always call someone, like a trusted employee, to check on the business.
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There is an excellent possibility of earning more.
Having a business allows you to do more and earn more. You get even more motivated to scale up your business when you reap the financial rewards.
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You can build your network as your business also grows.
As your business expands and grows its clients or customer, you also expand your network. Satisfied customers or frequent customers could even become your friends. You develop good business relationships with clients and may even meet like-minded and potential business partners.
Cons
However, there are also downsides and challenges to having a business. By knowing and understanding these challenges, you will be able to prepare yourself to overcome them.
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You fund the business.
For many starting entrepreneurs, funds are initially sourced from a business loan, personal savings, investments, or retirement funds. When you commit all these to a business, personal and family needs may be second priority.
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You are responsible for everything.
This scenario is especially true in the beginning when you likely have to do everything on your own. It could also mean sacrificing long hours and learning everything there is to know about the business.
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You shoulder the risks.
Risks are always a part of owning a business, and success is not always guaranteed. So, financial setbacks could hit you when you leave a secure job to pursue a business, and the business fails.
These risks are not always about money too. Time commitment, for example, can put a strain on family and friends. In the pursuit of making the business successful, some entrepreneurs may also have struggles in their personal life. So, make sure that there is always a balance in everything, even when you have challenges in the business.
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There is uncertainty about the business’ stability.
Even when the business is having a good start and is continuing to do well, some factors may turn the situation around. You may also be forced to take on business loans to keep the business running without a guarantee that it will survive.
Thus, you have to plan for potential threats and have a backup plan for worst scenarios.
What Do I Need to Consider Before Pursuing a Business Opportunity?
Starting a business can be stressful, as a successful one requires timing, assessing your finances, careful planning, completing legal paperwork, and proper execution. In short, there is a lot to do and consider.
Here are some critical things to do before venturing into a business
1. Nature of Business
First, you need to think about what type of business you will offer. Is it a service or a product?
If it’s a service:
- It can be professional expertise, consultation, or the rendering of skills.
- Or, it can also be restaurants or cafes, salons, and many more.
If it’s a product:
- It could be anything manufactured or ready to be sold as-is.
2. Research the Industry
Understanding the industry you want to enter, major competitions, as well as possible suppliers is a business must. In doing your research, you may also include
- Creating a good marketing plan.
- Government compliance.
- Assessing industry risks.
3. Target Customers or Clients
Knowing how to target customers is the key to having a successful business. Identify your market by determining who will need your products or services. Understanding your audience’s needs can help you fine-tune your offerings. The more specific your market is, the more likely your business will succeed.
4. Location
The location of your business also holds a big part in making the business successful. To some businesses, this could even be the most crucial factor.
5. Capital
Capital is the amount or value you need to get a business started, and this could be in the form of cash or non-cash assets. List down all possible expenses such as operating expenses, lease payments, renovation costs, and assets to purchase.
6. Business Structure
You’ll also need to determine how you’ll form the business, as this will influence the day-to-day operations, including taxes and risks. The simplest and most common structure for small businesses is a sole proprietorship. As you scale, you may convert to a different business that is more appropriate and beneficial to the company.
Common Business Structures
- Sole Proprietorship
This structure is easy to form and gives you complete control of the business. However, this type of structure does not produce a separate business entity, and your business assets and liabilities are not made separate from your personal assets and liabilities.
A sole proprietorship is ideal for low-risk businesses. It is also suitable for owners who want to try out the business before launching it formally.
- Partnership
This type is the simplest structure for two or more people starting a business. It could either be a
- Limited Partnership (LP). Only one general party has unlimited liability, while all the other partners have limited liability.
- Limited Liability Partnership (LLP). All owners have limited liability; the LLP protects each partner from debts against the partnership.
Partnerships are ideal for businesses with multiple owners who want to try out the industry before launching it formally.
- Limited Liability Company (LLC)
An LLC protects owners from personal liability, specifically personal assets like savings and properties. It protects owners if a business fails and faces challenges like lawsuits or bankruptcy.
LLCs are good for high-risk businesses and owners with significant assets to protect.
- Corporation
A corporation is a legal entity that separates the business from its owners. They are also strictly required to pay income tax for profits made and dividends paid to shareholders.
As such, they are also subject to more extensive record-keeping and reporting. Yet, while the costs of forming this business structure are high, a corporation offers the most robust protection to its owners in terms of liabilities.
Corporations are ideal for medium or high-risk businesses and those planning to go public.
- Cooperative
A cooperative is a business owned by and operated for those using its services. To become a member or a user-owner, one must purchase shares. All profits and earnings are then distributed to the members through dividends.
In Summary,
| Business Structure | No. of Owners | Liability | Taxes |
| Sole Proprietorship | One | Unlimited personal liability | Self-employment tax Personal tax |
| Partnership 1. Limited Partnership (LP) 2. Limited Liability Partnership (LLP) | Two or more | LP: unlimited liability for one party only LLP: limited liability for all owners | Self-employment tax (except for LPs) Personal tax |
| Limited Liability Company | One or more | No personal liability for owners | Self-employment tax Personal tax or Corporate Tax |
| Corporation | One or more | No personal liability for owners | Corporate Tax |
10 Popular Businesses Opportunities in Singapore
Turning your small business ideas into a viable business is truly exciting. Still, if you want to start a business soon but are still searching for a potential one, here are some business opportunities to consider
1. E-commerce
An e-commerce business allows you to transmit goods and services to a larger audience. You can do this even without having a physical location. E-commerce is a big hit in Singapore for the following reasons:
- Singapore has excellent internet speed and technology.
- Shoppers are willing to purchase online, big-ticket purchases included.
- Many young individuals are tech-savvy and fond of digital purchases.
If you are interested in the e-commerce opportunity, here are some things to consider
1. You need to find a niche.
Know that there is strong competition in the e-commerce space. Thus, you need to establish your brand in order to be successful.
2. You need to create a website.
Creating a website is like putting a face to your business. Choose a domain name that matches your business.
3. Choose an e-commerce platform.
These platforms help you launch your business and manage your business. Generally, this includes managing inventory, orders, shipping, payments, and customer service. Here are some popular e-commerce platforms
- Shopify. A user-friendly solution for many e-commerce businesses. They offer four subscription plans, and you can start for as low as S$9 per month with Shopify Lite.
- WooCommerce. WordPress users can already start selling on their accounts through WooCommerce. This plug-in is free to download and has ready-to-use e-commerce features.
- Squarespace. Like Shopify, Squarespace is also user-friendly. However, it does not offer as many features as other alternatives.
2. Dropshipping
Another online business opportunity to explore is dropshipping. With dropshipping, a business owner doesn’t need to stock and keep an inventory of products to be able to start selling. You can directly ship a customer’s order from the supplier’s warehouse without dealing with logistics.
There are many advantages to dropshipping and here are a few:
- Low start-up and overhead costs.
- You can run your digital store from anywhere.
- Easy to start and scale.
- No need for a physical store.
To start your dropshipping business, here are some quick steps:
1. Find a niche.
2. Register your business.
3. Find reliable dropshipping suppliers.
4. Choose a platform.
5. Set up your online store.
6. Begin marketing to potential customers.
As you will be heavily relying on suppliers, choose those who can deliver on time and have responsive customer service. Here are some popular dropshipping suppliers in Singapore:
- AliExpress. This China-based e-commerce platform is one of the best places to source suppliers. You can choose from 40 categories of products, and find customer reviews and ratings for these products too.
- ChinaBrands. This dropshipping supplier has warehouses all over the world and this helps cut delivery costs and time.
- Shopee. With Shopee’s China Marketplace, Singaporeans can buy directly from China merchants without paying shipping fees.
Once you understand the basics of dropshipping, succeeding in this business line would be easier.
3. Bookkeeping Services
One job that is always in demand for all types of businesses is bookkeeping. Also, it is very easy to start with a little cash.
Bookkeepers are essential for businesses to thrive and track financial growth. Often, they help businesses to
- Produce crucial financial statements.
- Manage accounts payable and receivables.
- Get an overview of their finances.
Bookkeepers don’t need to be certified public accountants. Still, one can establish a bookkeeping business through training programs and experience. If you want to venture into this kind of business, here are some things to do
1. Pick your niche. Specializing in a specific industry will set you apart from competitors.
2.Register your business. To make things official, choose a business entity and register your business.
3.Obtain insurance. Getting insurance for your business will protect you from liabilities in case you make a mistake on your client’s books.
4.Choose a bookkeeping software. This will be the foundation of your business so consider a trusted software like QuickBooks Online or Xero.
5. Set up your business. Some necessary things to set up include your website, a client database management tool, file-sharing tools, and a business bank account.
6. Set up your prices. Price your services competitively and accordingly.
7. Find your customers. Use creative ways of marketing yourself through social media and other channels. A social media marketing expert may help you with this.
8. Check your funding options. You can use a business credit card to put all your expenses in one place.
9. Set up an office. You can keep your costs low by setting up a home business as you are still starting out. If a home office is not applicable, try looking for a co-sharing place.
4. Laundry Services
Most Singapore residents are always busy with work and other equally important responsibilities. Having their laundry done through a laundromat is a great way to save them time. If you are looking forward to putting up a laundry business, look for an ideal location for the business to thrive like:
- Neighborhoods with blocks of apartments.
- Commercial areas where you could cater to big customers like hotels, schools, and restaurants.
To start your business, you can either set up your own brand or buy a franchise. If you decide to start your own brand, you need to prepare a realistic plan and follow through iwith t. On the other hand with a franchise, which is a more expensive option, the business planning process is made shorter and you get compensated with a ready-to-use business model plus equipment to use.
Quick steps to starting a laundry business:
1. Choose the legal business entity.
2. Prepare documents for registration.
3. Register your business.
4. Apply for the needed licenses to operate.
5. Virtual Assistant (VA) Services
Becoming a virtual assistant is another growing business opportunity in Singapore. Simply put, offering businesses your administrative and creative skills in exchange for a set rate. Plus, you can already use the readily available computer and internet in your home to get started right away.
Services that you can offer may include
- Social Media Management. Create social media presence for your client by creating content, sharing, or simply engaging with the audience.
- Blogging. Aside from writing content, tasks may include managing readers’ emails, improving SEO, and scheduling social media posts.
- E-commerce. As business owners often have their hands occupied, some hire VAs to help them manage their e-commerce stores.
- General Administrative Work. While this is not a highly specialized niche, it is a straightforward way to market your skills.
- Bookkeeping. This niche is quite lucrative for someone with adequate experience in this field.
Setting up your business is easy and entails a few steps:
1. Focusing on your offer. You can niche down as you grow in experience and acquire training.
2. Setting up your business. Set it up either as a sole proprietorship or a limited liability company (LLC).
3. Create your website. Showcase your skills and accomplishments through this virtual CV.
4. Find a support group. Join groups that share the same niche and can offer helpful advice.
5. Provide satisfactory service and request feedback. Customer feedbacks help you improve and earn more clients.
To find more clients, you can use platforms like Upwork, Fiverr, FlexJobs, and many more.
6. Cleaning Services
With the pandemic, people are more conscious of hygiene and cleanliness. However, Singaporeans are now opting for professional cleaning services to keep their homes extra clean with busy schedules.
There will always be a need for this service as homes, offices, and commercial spaces have to be clean. And because many today lead hectic lifestyles, putting up a business in cleaning services is an excellent idea.
In setting up a laundry business, you have to:
1. Get your business registered. You need to register your business with the Accounting and Corporate Regulatory Authority (ACRA).
2. Secure the licenses and permit needed. You will need to obtain a cleaning service license from the National Environment Agency to run your cleaning business.
3. Get your workforce ready. Ensure that your employees attend at least one module under the Environment Cleaning WSQ Framework.
7. Consulting Business
Hiring a consultant can be a costly affair in Singapore. Yet, it is a sought-after service because of the specialized knowledge that clients needs. Businesses seek help from consulting agencies to seek advice, business strategies, and solutions.
If you want to pursue this type of business, you need to
1. Decide on your industry or niche. It could be any industry you are keen on. It could be financial, IT, technology, or digital marketing – it’s all up to you.
2. Get your business registered. Register your business with ACRA.
- Prepare and draft your incorporation documents.
- File your documents with ACRA
3. Register for the Goods and Services Tax (GST). Do this once you receive your certificate of incorporation.
4. Secure needed licenses. The needed license will depend on the field you are specializing in.
5. Organize your finances. Make sure you have enough funds to sustain your business.
8. Catering Business
Food businesses have always been a profitable venture for many entrepreneurs. Even when the pandemic hit, many food businesses still survived by offering their products online. There is a significant demand for catered food in Singapore due to busy and hectic schedules. So, if you are interested in venturing into the food industry, then it would not be a bad idea.
To start your catering business, you need to
1. Register your business. Follow the registration process laid down by the Singapore government.
2. Understand requirements about premises. Your catering unit and the food preparation premises must also be registered. Additionally, you should also secure a food hygiene certificate from respective authorities.
3. Obtain licenses needed. This includes food licenses, tax-related registrations, and other permissions.
9. Computer Repair
Tech experts also dream of becoming their boss. Nowadays, everyone owns a laptop, a desktop computer, a printer, and electronic gadgets. So, if you have the skill to repair this stuff, why not start a computer repair business.
If you are ready to open your door to a computer repair business, here are some things to do:
1. Get your funds ready. You will need funds to purchase tools and equipment.
2. Write a business plan. Include ideas on how to get your business running and future plans.
3. Decide on which services to offer. You may choose from several specialties such as troubleshooting, computer repair, server maintenance, and more.
4. Determine your target customers. Is it businesses, individuals, or both?
5. Identify the business structure. You could register it as a sole proprietorship or an LLC for this type of business.
6. Determine your workplace. Most computer repair businesses work from home, a storefront, or do home services.
10. Pet Shop Business
The pet-owning and pet-loving culture is a well-embraced lifestyle in Singapore. Thus, the pet industry has been experiencing significant growth in recent years.
Animal lovers who possess a strong entrepreneurial spirit could do well in opening up a pet store business.
To start operating:
1. Register your business with ACRA.
- Obtain a pet shop license. You need to obtain a pet shop license from Animal and Veterinary Services (AVS) for the sale of certain pets. However, there is no required license for services such as pet grooming, pet boarding, pet photography, and the sale of pet feed and pet products.
Additionally, you need to pass mandatory training on pet welfare and animal management before you can obtain a pet shop license.
2. Submit required documents. These documents will include a Medisave statement, a copy of the tenancy or lease agreement, and layout plans of the shop.
3. Get ready for inspection. Shop premises will be inspected to ensure that requirements are met.
Conclusion
Singapore has always been keen on helping their people improve their way of life. As such, the government encourages and supports industries and businesses. In fact, Singapore’s company registration process is one of the simplest and most straightforward in Asia.
Key Takeaways
- Starting a small business is a great way to acquire wealth.
- A defined target market will not only help you gain new customers and keep loyal ones.
- Knowing your business’s purpose is essential to making significant decisions.
- The government helps businesses by providing easy access to capital to aspiring businesses, tax incentives, grants, and other assistance schemes.
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