All successful businesses started from scratch. However, starting a business in Singapore comes with a unique set of challenges. With strong trade and investment, Singapore is considered one of the most competitive Asian countries to do business with.
Although Singapore is a business-friendly country, there are certain laws and policies you need to keep in mind. Thankfully, with proper planning and preparation, jumpstarting a small business in Singapore is simple and straightforward. Don’t know where to start? Here is a step-by-step guide on how to start a small business in Singapore.
Step-By-Step Guide On How To Start Your Business
Step 1: Finalise Your Business Idea
The first step is to thoroughly evaluate your business ideas. This is the time to determine whether your idea is viable, feasible, and profitable.
Seek out people you know well and trust. Another option is to conduct market research. Talk to people who fit your target market. Ask what they need so you can determine whether your business idea will be able to address it.
Here are a few things you need to keep in mind:
- Is your business idea specific enough?
- Is it realistic and attainable?
- Is your business idea addressing a specific problem of your target market?
- Are you entering a niche market? If so, is the market already saturated?
- Do you have plenty of competition? If so, what makes your business idea different?
- How will you measure business success?
Use these questions to critically and thoroughly flesh out your business idea.
Step 2: Formulate a Business Plan
Now that you have a solid business idea, it’s time to create a business plan. This doesn’t have to be complicated. However, it needs to set a framework for your company. Additionally, it must identify your overall goals and your growth benchmarks.
A business plan is a tactical document that highlights factors like market analysis, structure, and potential customers. Here are some of the most important parts:
- Executive summary
- Company overview
- Vision and mission statement
- Market analysis and target audience
- Products and services
- Marketing plan
- Financial plan
- Logistics and operational plan
Step 3: Study Your Capital and Finances
The next step is to determine how to fund your business. If you are not able to finance your business on your own, it’s best to secure funding through other sources.
As a business owner, there are two types of costs you need to prepare for:
- Capital Cost: This represents an investment in the business. It’s a one-time amount you’ll need to launch your business. This includes materials, equipment, and any funds needed to register your business or a website.
- Fixed Cost: These are the expenses you’ll need to pay whether you are gaining a profit or not. These expenses include administrative costs, monthly rent, utilities, insurance, technology costs, and more.
You can use your personal savings to jumpstart your business. Unfortunately, you may run out of cash. If you don’t have enough cash, it’s time to consider alternatives.
First, try borrowing from family or friends. You can also check out the options below if you are wondering how to start a small business in Singapore:
Apply for a Bank Business Loan
You’ll need cash to pay for new equipment, business renovations, rent, and other expenses. Funding your business with a loan will give you the cash you need. With a Singapore business loan, you’ll be able to add capital to your company.
You have plenty of bank loan options to choose from:
- Personal loans
- Startup business loans
- Temporary bridging loans
- SME Micro loans
- Property financing
- Equipment financing
Apply For Loans from Licensed Moneylenders
Not qualified for a bank loan? Or maybe you need quick cash?
You can consider borrowing from best licensed money lenders in Singapore. There are credible moneylenders in Singapore who offer different loan packages including personal, business, and foreigner loans.
For secured loans, there is no limit to what you can borrow. However, for unsecured loans, you can borrow up to 6 times your monthly income. Please refer to the table below
|Borrower’s annual income||Singapore Citizens and Permanent Residents||Foreigners residing in Singapore|
|Less than $10,000||$3,000||$500|
|At least $10,000
and less than $20,000
|At least $20,000||6 times monthly income||6 times monthly income|
Licensed moneylenders can only charge a maximum of 4% per month interest rate. And if you fail to repay the loan on time, you’ll be charged a late interest rate of 4% per month for every month the loan is repaid late.
The key to getting the best loan is to compare loan packages from different moneylenders. Do your due diligence and understand the terms and conditions of each loan.
Other attractive business financing schemes in Singapore are:
- Business Angel Scheme
- Technology Enterprise Commercialization Scheme
- StartUp SG
- Government Funding Schemes
- Sector Specific Accelerator Programme
Before choosing a financing scheme for your startup business, you need to find out which one will fit your requirements.
Step 4: Brainstorm Your Branding Concept
Branding helps customers recognize and identify your business. That said, your company brand must be reflected in everything you do – from online content to the way you provide customer service to your staff uniforms.
One way to establish a brand is through your business name. Come up with a unique and memorable business name- one that is easily recognized.
Remember, all aspects of your business from your company name to the Board of Directors must be registered with the ACRA or Accounting and Corporate Regulatory Authority of Singapore. Note that ACRA does not allow offensive business names.
Step 5: Build a Business Website
Most of your target market is now online. That said, establishing a strong digital presence through social media platforms like Facebook or Instagram is a good place to start. But don’t stop there. It’s also highly beneficial to have a business website.
Why build a website?
- To attract people to your website. It’s a means to provide content that is useful and valuable to your readers
- Win prospects over. If readers find your website useful and if they get valuable information, they’ll feel good about doing business with you.
- Nurture loyalty. A good website will help build rapport and customer loyalty.
Think of your website as an online storefront. Create a good first impression for many customers and prospects. They can use your website as a means to get information about products and services.
Worried about the costs? There are free and affordable hosting websites like:
Step 6: Define Your Business Structure
The next step is to choose the type of business structure for your company. This will affect the following factors:
- The amount you pay in taxes
- The amount of paperwork that needs to be done
- Your personal liability
- Your ability to raise money
The ideal business structures for small businesses are:
- Sole Proprietorship: This is one of the most basic business structures. With this structure, all profits will go directly to the proprietor. Additionally, it offers complete managerial control to the owner. However, the owner will be personally liable for all financial obligations of the business.
- Partnership: This legal structure involves two or more people. The business partners agree to share the profits and losses of the business. In Singapore, ACRA allows up to 20 individuals to become business partners.
- Limited Liability Partnership: As the name suggests, with this business structure, each partner’s liability is limited to a certain extent or a fixed amount. That said, partners under this structure will not be held personally liable for obligations beyond their contributions.
Step 7: Learn the Tax Obligation Compliance
In Singapore, taxes are charged by legal authorities. The Inland Revenue Authority of Singapore or IRAS is the Singaporean government’s primary revenue collection body.
When starting a small business in Singapore, you need to learn about Singapore’s tax obligations. Here are a few things you need to know about:
- Tax filing due date: Keep in mind important dates such as the tax filing due date which is November 30. A company must file a complete set of returns – including Form C, audited/unaudited accounts, tax computations.
- Tax Exemptions: New start-up companies get a tax exemption, while others get a partial tax exemption from the fourth year of assessment onwards
- Income Tax Basis Period: Singapore’s statutory income for the year of assessment is computed based on the income from the preceding calendar year from all sources.
Step 8: Register Your Office Address
Another requirement for incorporating a business in Singapore is registering an office address. This is where all communications and notices to the company may be addressed. Additionally, it is also where your company’s records are kept.
A registered office address must be operational and accessible to the public during office hours. But what about home businesses that only operate at a residential address?
You can register your private residential property or HDB as your office address. You can visit ACRA or click here to learn more about how to register your office address.
Step 9: Register Your Business
You’ve finally got the basics done! Now, it’s time to incorporate your business. This process shouldn’t take too long. In fact, if you have all the documents ready and your application doesn’t require additional investigation, it may be approved within a day.
- Get ACRA’s approval for your business name
- Procure the necessary documents:
- Company name registered with ACRA
- A brief description of business activities
- Details of Singapore registered address of the company
- Particulars of shareholders
- Particulars of directors
- Particulars of company secretary
- Foreign Entrepreneurs must submit a copy of their passport and residential address proof (overseas)
- Foreign Companies must submit Memorandum & Articles of Associations
- Singapore Residents must submit a copy of their Singapore identity card
- Submit Application to ACRA via BzFile
Step 10: Establish a Good Digital Presence
As previously stated, most of your customers are already online. They use search engines and social media to find big or small businesses. To compete in the current market, you must establish a good digital presence.
To start, you can create social media pages for your small business in Singapore. Here are some of the best social media platforms:
- Instagram: This platform has a highly appealing visual aspect. It’s perfect for younger audiences. Now, you can upload products on Instagram and customers can purchase what they want directly on the app.
- Facebook: This social platform has a massive audience reach. It’s a great platform for interacting with your audience. Additionally, their advertising feature allows you to target a specific market.
- Twitter: This is a great social media platform for building brand awareness. Plus, it allows you to connect directly with your audience.
- YouTube: Creating videos can help showcase your brand’s personality. With this platform, you can link published videos to other social media pages.
Kinds of Small Business Ideas You Can Start At Your Home
Thinking of starting a small business in Singapore?
You can always start small in your own home. Be your own boss! Here are some popular ideas for a small business in Singapore:
- Bookkeeper: Be a bookkeeping professional service provider. You’ll need to be a trained accountant and have knowledge of bookkeeping.
- Virtual assistant: You don’t need specific training to start offering virtual assistance services. However, having excellent organizational skills is a bonus.
- Copywriter: You must have a good command of the English language
- Marketing consultant: You’ll need a background in marketing.
Starting a small business in Singapore takes time and effort. On top of that, you’ll need capital. With a business loan, you’ll get the funds you need to jumpstart your business idea.
To get the best loan deal, compare the best business loans from the top moneylenders in Singapore. Loan Advisor offers three free quotes for loan requests to find the best returns for your investment.