How to Start a Business: Ultimate Guide
30 minute read
If you are reading this article, you have most likely thought about starting your own business at some point.
There is no surprise that being an entrepreneur seems very appealing to many. After all, you get to be your own boss and set your own terms and conditions.
However, figuring out how to start a business can oftentimes be a bit overwhelming. Determining what you are going to sell, how, and who you are going to sell tends to be a bit overwhelming.
On top of that, every now and then, we see new trends that reshape the business landscape, and that always means that companies have to adapt to changes in order to succeed.
But have no worries. If you’re wondering how to start a business, in this step-by-step guide you can read about all the important tips that you will need once you decide to start your own business endeavor.
- Benefits of owning a business
- Downsides of owning a business
- What business idea to choose?
- How to choose your business idea?
- You have an idea, now what? Decide on your type of business.
- Office vs. Co-working space
- Fundings & grants
- Register your business
- Opening a business bank account
- Initial Investment
- After your first sale
- Hiring staff
- Keep your business running with various marketing strategies
- Why start your business in Singapore?
Benefits of owning a business
There is no doubt that being a business owner, an entrepreneur, can be very rewarding when done right. For all of you who want to learn how to start a business and succeed, know that you will enjoy many benefits along the way.
You are your own boss
Starting a business on your own means being your own boss. You lay down the law and you get to enjoy the maximum level of independence while working.
As a business owner, you call all the shots and make all business moves that are vital to your own success. You set the working hours, you negotiate the projects, and you win. However, if things don’t go according to plan, you will have to deal with problems on your own too.
Work to your own schedule
You no longer have to follow so many guidelines or rules set by someone else. If you feel like it, you can sleep longer in the morning and then stay later in the day to finish up your daily tasks.
If you have to take care of your family or you have an unusual lifestyle, you can tailor your workday in any way you wish. Running a business on your own allows you the lifestyle flexibility necessary to do whatever you want to
Do you need to raise a family and still have a career? Being your own boss allows you to do exactly that.
More rewarding and creative freedom
It often happens that the most powerful new ideas come from small business owners that venture out on their own after no one was willing to hear out their ideas in a larger workplace.
Many great businesses started small, including Disney and Facebook. Zuckerberg started out from his dorm room, but he had an outstanding idea.
On top of that, you should also keep in mind that all financial rewards go to you. Of course, there is a high financial risk, but running your own business also gives you a chance to make more money than if someone else’s company employed you.
Downsides of owning a business
Every coin has two sides. The scenario is no different, even when it comes to running your own business. Take a look at the disadvantages of small business ownership.
You need an ample amount of financial resources to start and grow your own business, so it might be necessary to commit a good part of your savings or even take out a loan to get things started.
All of this brings a risk of financial loss and there is no guaranteed success or profit. The early phases don’t generate much cash, so be prepared for that.
Hard work and commitment
Rest assured that starting a business requires hard work and commitment, typically in the first few stages of growth.
Running a business can be quite time-consuming. In theory, one can take time off as they like, but in reality, there is no method to get away from everything. Vacations will also be difficult to take and will often be interrupted.
However, rewards far outweigh the shortcomings as the business grows.
What business idea to choose?
Choosing a business idea that is profitable and has considerable potential for growth is crucial if you want to make it with your business.
You might already have a vague or extensive plan for your business, but if you’re not so sure about the industry and the type of business you would like to invest in, take a look below.
Here are a few business ideas based on the existing market trends that could work for you. These ideas don’t require a large budget to start with.
The eCommerce industry has significantly reshaped the modern marketplace in recent years. This business model has become very popular, as it allows entrepreneurs to start and grow a business quickly (compared to traditional businesses).
If you give this business model a go, you’ll get to enjoy some of its numerous benefits:
- An eCommerce business does not require physical stores and you get to tap into the worldwide customer base.
- Owners of eCommerce businesses save money that would be otherwise used on rent, utilities, maintenance, and other costs related to physical stores.
- Digital products in the eCommerce industry can be sold with little to no overhead costs.
- These businesses allow entrepreneurs to scale up easily.
- Keeping an eye on logistics is easier for eCommerce business owners.
Adopting a freelance business model might not be a bad idea at all. Just recognize what you are good at and pitch it to
For instance, a lot of workers in the UK now work on a freelance or contractual basis. This means that they work on an hourly project fee basis providing their services to clients in exchange for money.
Just nail down that special skill you have and monetize it. Some more popular skills today include web development, graphic design, and copywriting.
Business consultants are in demand across all industries. These individuals usually work on a project-by-project basis providing expert advice to their clients in specific fields.
The most common types of business consultants are in the fields of marketing, finance, and management.
Due to the pandemic the whole world is combating today, people have had to switch to home workouts and home gyms.
This paved the way for many athletes to become personal trainers. To be precise, the most popular business model of this kind nowadays is the online personal trainer model.
Online personal training is in high demand because it enables people to work out whenever and wherever they want to.
How to choose your business idea?
Before actually devising a business plan, you should think about what kind of business you want to run. There is little to no point in choosing a business idea but not enjoying it.
So, how should you choose your business idea?
First, ask yourself a few questions.
- What do you like to do?
- What are you good at?
- Do you like to help people?
Explore what you love to do, and your business will be rewarding in many ways.
Now, see if you would like to work alone or in a team. This will determine if you are looking for a home business idea, an online business idea, or a business idea that can grow into something bigger (the scenario where you have an office full of employees).
Last but not least, think about the skills and experience you have. List all the skills and see how they combine and fit with your new business idea. Selecting a business idea that matches your skills and experience can make the process of starting a small business easier.
You have an idea, now what? Decide on your type of business
When starting a company, keep in mind that you need to select a business type, as each business type has its own legal business structure and rules.
There are four main business types of businesses:
- Sole proprietorship
- Limited liability company (LLC)
Think well before you sign any papers because your business type has to match your business model and its needs.
Take a look at our article on business types and see how a sole proprietorship compares to a private limited company.
Office vs. coworking space
You will most likely need space for work no matter the type of business you choose.
And this is where a coworking space or a traditional office space could help you. Let’s see what you would get if you went for a traditional office and what modern coworking spaces bring to people that choose to work in such an environment.
There is no doubt that having a traditional, fully furnished office has its perks. After all, a good portion of workers still believes that it is easier to get work done in such an environment.
Traditional offices have an environment that is conducive to concentration, and there is the compartmentalization of their work and home lives.
On top of that, many people like to make friends the old-fashioned way (not during work at home online). Some prefer to socialize with people in the office, even if it’s the good old watercooler talk.
Also, the possibility to interact with colleagues also offers the chance to form valuable relationships that could be of great importance later on in life.
On the other hand, coworking space has many great benefits too.
Coworking spaces usually have an open-concept layout and are shared with anyone who is a member of the space.
To maintain an environment of collaboration and communication, the spaces are usually filled with comfy furniture, shared technology (such as printers and Wi-Fi), and even free coffee and snacks.
The main benefits of coworking spaces definitely include the possibility for workers to move around within the area and meet individuals who might be great networking and collaboration opportunities.
On top of that, there are no miscellaneous expenses such as utilities, renovations, and furniture. These are all covered by the fee. There are no high up-front costs or long-term commitments.
Fundings & grants
It is definitely wise to consider checking various funding and grant options to acquire a monetary boost for your business. On top of that, no one can say when we will see the end to this pandemic and that makes aid options even more important to consider.
The Singapore government has put aside almost S$100 billion resilience budget to support businesses going through the pandemic.
The Jobs Support Scheme (JSS) devised by the government will support millions of local employees in Singapore. The scheme will be available for 17 months for most industries. Extra support shall be paid out by March and June 2021.
The government is always ready to assist entrepreneurs during the growth phases through regular grants and fundings. It offers pro-business grants, subsidies, and funding. These options can help any entrepreneur grow their business, both locals and foreigners.
For example, a great scheme to really consider would be the Startup SG Equity Program. As part of the Startup SG Equity scheme, the government co-invests with independent, qualified third-party investors into startups.
Register your business
You have two options when it comes to business registration. You can either do it yourself or find an incorporation services company to handle the process for you.
Register a business on your own
Take a look at the processes you need to take care of to register a company in Singapore:
- First, you should think of a good business name. Create a list of business names and then narrow down the list to only a few options before you make the final decision. Also, check if your selected business name is available.
- The main person behind a company (its director) has to be at least 18 and legally permitted to hold a directorship in their given jurisdiction.
- If you plan on basing your company outside of your home country, keep in mind that most legal systems in the world probably require at least one resident director. This means that you will have to employ at least one local to meet the requirement.
- Check the ownership requirements if you plan on registering your company outside of your home country. Some countries allow 100% foreign ownership but some require a number of shareholders to be local.
- Check the requirements regarding the paid-up capital. Many countries nowadays have lenient requirements (as low as $1). Keep in mind that you can increase the share capital once you finish the registration.
- Make sure to register a proper address for your company, i.e. find a business location. Check if the address has to be a physical location or just a PO box.
- Check if you need to appoint an auditor once you have registered your company. In most jurisdictions, it is necessary to register an auditor within three months of registration.
Hire a company to incorporate your business
As a good alternative, you could also find reliable incorporation services.
A company that offers quality incorporation should allow you to register your business without having to go abroad if you want to register a business in a foreign country. Additionally, the pricing is transparent, all the data and important documents are stored online and protected with encryption technologies.
This leaves you with more time to focus on business and business duties instead of spending time on the actual incorporation. This is a benefit that many entrepreneurs are aware of when they choose to have a third party register a business for them.
Opening a business bank account
Before you actually go to a selected bank to open a business bank account, it is worth listing out the types of bank accounts that you can choose from. Keep in mind that you need to choose according to your business type and needs and that a business bank account should be perceived as a tool for managing operating cash flow.
Take a look at the most prominent types of business accounts:
- Business checking account – the most versatile of all business bank account types, with the fewest restrictions on what users can do with their money.
- Business savings account – a better option than checking accounts for operating profits users don’t plan to use in near future.
- Business certificate of deposit (CD) accounts – alternative to business savings accounts that can earn a company even more in interest. It is not a good option to keep money that covers operating expenses.
- Business money market accounts (MMAs) – similar to savings accounts, but they limit users to six monthly penalty-free withdrawals per federal law in most jurisdictions.
- Merchant account – this type of account is often necessary for small businesses that accept debit and credit card transactions. When a customer pays with a card, the money goes into this account first and then gets transferred to other business bank accounts.
How to open a bank account?
The steps listed below will help you get started with the paperwork needed to open a business bank account:
- Completed corporate account opening form signed by authorized company signatories
- Director’s resolution to prove the company was given the green light to open a bank account
- Certified true copy of the company’s business profile from the company registrar
- Certified true copy of passport or residential address proof of signatories, directors, and beneficial owners
When it comes to your initial investments, there are some things you should be careful about as well as some things you absolutely need to calculate and prioritize.
Watchouts and calculations
Starting a business is exciting, but it is also a process that requires money. Expenses like office space, legal fees, payroll, business credit cards, and other organizational expenses can really add up.
- In the beginning, it is wise to keep an open mind and prepare for issues that may arise later. As a business owner, you should start your business plan by simply understanding the potential of the business idea.
Do not instantly assume that your idea will bring maximum rewards. Instead, test your idea in a small, inexpensive way that gives you a good signal if customers need your product and how much they can pay for it.
- The second most important thing to cover is to accurately estimate your costs. Every startup needs six months’ worth of fixed costs in order to roll out properly. Devise a plan that covers your expenses in the first month, identify your customers before opening the doors so that you get to start covering those expenses.
Never underestimate the expenses and keep in mind that they can rise as the business grows. It is often easy to overlook costs when thinking about the big picture, so you need to be careful when planning.
- It is necessary to identify one-time costs and ongoing costs. Also, think about essential costs and optional costs.
One-time expenses such as incorporation fees are relevant in the startup process. If there’s a month when you need to make a one-time equipment purchase, your money going out will likely be greater than the money coming in. On the other hand, ongoing costs are paid on a regular basis and include expenses such as utilities. Factor them in too when thinking about the initial investment.
Last but not least, think about your essential and optional costs. Essential costs are expenses that are necessary for the company’s growth and development, while optional costs occur when the budget is strong enough to allow them. If a business has an optional and nonurgent cost, it may be best to wait until there is enough cash for the purchase.
Be careful and be accurate when calculating the expenses. All of these and some other minor expenses dictate how much you need for your initial investment.
Your business should be insured from day one, so it is smart to seek great company insurance services. But, it is first necessary to check all insurance options that may sound interesting to your business.
- Professional indemnity insurance provides coverage against legal liability stemming from acts of negligence based on profession. This is important for people under contracts with large clients that can afford to take legal action against you.
- Management liability insurance covers all directors, officers, and anyone who makes an authorized management decision for any error in their management and fiduciary duty.
- Commercial general liability insurance covers any accidental bodily injury or damage to a property that has been made during the business operations.
- Work insurance compensation covers the liability of an employer to pay compensation to their employees who have suffered work-related injuries, occupational illnesses, or diseases.
- Commercial business package insurance is a comprehensive multi-line insurance option that can be crafted to meet the needs of a specific business. It often offers a more affordable and critical defense against elements that can disrupt or damage a business.
After your first sale
Securing your first sale is always exciting. However, it is also important to understand various financial aspects and accounting aspects that deal with taxes and legal requirements.
Accounting and tax considerations
Many entrepreneurs turn to countries like Singapore to establish their business operations. The attractive tax regime in this country is known for its low tax rates, and there is an overall business-friendly environment.
However, keep in mind that individuals, business entities, and even some NGOs are required to pay tax on all profits. This covers income arising or derived from the country and certain foreign-sourced income from trade, profession, or business.
Definitely take a look at accounting requirements and tax rates that apply to your business’s jurisdiction. Failing to take proper care of taxes and finances can result in legal troubles.
Some countries are known as tax havens but that doesn’t mean that businesses don’t need to pay taxes there. Bear in mind that not paying taxes results in legal penalties.
Outsourced bookkeeping or company accountant
It is often the case that small businesses don’t have what it takes to hire an accountant. The majority find it difficult to acquire sufficient resources to pay a decent accountant every month.
That is why many small businesses turn to professional bookkeeping services. This means that you outsource the whole accounting department in order to save money but still enjoy premium accounting services.
The obvious benefit when outsourcing accounting and bookkeeping services is the cost-effectiveness.
Generally, the money saved by outsourcing can have a considerable effect on your startup. There is no need to pay salaries, taxes, office supplies, and benefits for full-time accountants or even part-timers.
Accounting factors: final year statements
It is important to figure out various types of financial statements because you will need to put that knowledge into practice once you start your own business.
The law in Singapore stipulates that one has to prepare financial statements for the annual financial statements submittal according to the Financial Reporting Standards of Singapore.
After you register the business with ACRA, make sure to follow the rules regarding taxes. In this country, the Accounting and Corporate Regulatory Authority of Singapore is responsible for the registration of business entities.
Now, if you expect a medium to a large number of accounting transactions every month, you should perform monthly bookkeeping to keep the ledgers in order. If the number is relatively small, you can perform bookkeeping on a quarterly or annual basis (filing for tax annual returns).
Taxes and the fine lines
Last but not least, check every rule and law dealing with taxes, exemptions, and other factors. There are a few jurisdictions in the world that have lenient regimes where one can make great use of various benefits and exemptions.
For instance, in Singapore, it is important to learn about deductible and non-deductible expenses. This can save your business a decent amount of money.
Keep in mind that countries such as Singapore have a single-tier territorial-based flat-rate corporate income tax system. This makes them rank among the most competitive and business-friendly regions of the world.
Fortunately, there are quite a few options when it comes to finding the right talent to help you achieve greatness with your business.
Take a look at the options you could use and remember to pay attention to various regulations you need to follow.
To hire the right team of rockstars, you need to craft a good job posting, but you should also know where to look and that websites to consider for good talent pools:
Check the following websites before you start hiring:
- Cult Jobs
- Career Builder
- Freelance Zone
You can also hire through a recruitment agency.
A good recruitment agency is familiar with the target market and industry you are in. Experienced recruiters know the available talent, where they are and how to reach out to them, salary rates, career expectations, available skill-sets, and current hiring complexities.
Agencies of this kind also have extended reach. Some skills are hard to find, talented people are often passive or very selective. Recruiters will know where to look and how to approach the top-notch candidates for you.
Finally, one of the most important reasons why companies hire through recruitment agencies is to gain short-term access to key strategic skills.
Foreign Worker Pass/ Dependant Pass LOC Holders
If you plan on employing foreigners, you should know all the important details about work permits.
A Dependent Pass holder (DP holder) has the benefit to bring various family members to Singapore. A DP holder can live in this country, and with the proper approval, they can also work and study there.
However, in order for an individual to become a DP holder, they first need to acquire a regular work permit.
A company secretary is held responsible for looking after the administration work of a company.
He or she has the responsibility of keeping the company compliant with the statutory and regulatory requirements of the company and being a mediator between shareholders and directors.
When hiring people, one has to know that it is important to get the right talent, but also to treat the recruits fairly and according to the law.
One important part of the law deals with leave obligations, which are part of the benefits package. These have to be included along with the salary and can never exclude one another.
All Singapore employees are entitled to compulsory leave. These cover annual leave, sick leave, childcare leave, maternity (or paternity) leave, shared parental leave, and adoption leave.
Make sure to inform yourself about these perks and how they affect both employers and employees.
Keep your business running with various marketing strategies
A business can offer outstanding products, top-notch services, and much more, but still fail. A great product or a service is no good if no one knows about it, and that is why marketing is crucial nowadays.
Let’s take a look at modern digital marketing and traditional marketing options. Try to see how these two compare and where you should invest your money.
Digital vs. traditional marketing
Digital marketing refers to the processes where businesses use digital channels such as websites and social media pages to market their products and communicate with their audiences.
On the other hand, traditional marketing involves traditional channels such as billboards and printed media.
Obviously, the main difference between the two is the medium through which an audience finds a marketing message.
What should you use?
If you want to have a rock-solid branding strategy, you need to come up with a consistent color scheme, theme, and design for your website and all your marketing efforts.
Additionally, to reach more people and stay on top of your audience’s mind, you should conduct market research and definitely invest in social media marketing and your company’s blog.
Keep in mind that you should never ignore these channels, as they have helped many businesses grow and reap decent rewards.
This can be a bit intimidating at first, but as you build momentum, you will see that posting on social media to get attention becomes easier and easier over time. Once your business has grown enough, you should definitely consider hiring a social media manager to take good care of your company’s social media pages.
Additionally, you should not neglect your business blog. Appoint someone from your office to produce authentic blog posts that add value regularly. These should provide your audience with extra value.
Having a well-organized blog with regular new posts will establish your business as an industry authority and an organization that can be trusted.
Search engine optimization
Search engine optimization (SEO) is a delicate field. Many see it as another marketing channel, but it is much more than just a marketing tool.
SEO may seem complex and frightening, but it is a powerful weapon when used properly. In short, SEO is there to ensure that your website and its content have the best chances to rank high on the search engine result pages.
For a start, make sure you get the following things right to boost your chances of winning the game of SEO:
- Write quality posts that are not shorter than 800 to 1,000 words. Longer content is more powerful than short-form content from an SEO point of view.
- Google loves new and authentic content, so make sure you produce fresh content.
- Research top-performing keywords in your industry and implement them in your content.
- Optimize your meta titles, titles, headings, and subheadings along with alt tags.
- Include high-quality images with proper alt-tags.
Pay-per-click (PPC) marketing
Pay-per-click ads have become bigger than ever and this is a clear sign that you should do your best to take advantage of them.
This is a model of internet marketing where advertisers pay a fee each time one of their ads is clicked. Essentially, it’s a way of buying visits to your website, which is different from organic traffic.
Why start your business in Singapore?
Asia is slowly becoming the top international business hub. The emerging economies of various Asian countries prove that the tables are slowly turning away from the West to the East.
Singapore is one of the prime examples of how a government can stimulate business and attract foreign innovators to come and base their businesses there.
First of all, the government favors a single-tier, territorial concept, when it comes to their tax regime. So, it’s safe to say that a business located in this country enjoys more benefits and better tax rates compared to businesses located in some other parts of the world.
On top of that, the government is always there to support innovators and great thinkers, both local and foreign. There are many programs, accelerators, incubators, and schemas that are designed to help entrepreneurs grow their startups and reach stars.
Let’s not forget the vibrant business environment too. Singapore has welcomed entrepreneurs from all parts of the world and these individuals have moved there for good. Therefore, one will never feel lonely or alienated, since there is a good chance that making friends will not be a problem even if those friends are not strictly locals.
All of these perks and many more just go to show why many ambitious entrepreneurs wonder how to start a business in Singapore. The idea is attractive and the country has what it takes to support business people.
This guide provides enough information for all of you who want to know how to start a business. Cover all your bases before you venture out to start your new business. The conditions are great and so is the environment, but it’s always best to come prepared.
Go through the guide one more time, devise a business plan, start preparing the necessary documents and information. If you need any help, feel free to reach out to Sleek. We have helped numerous companies and we’ll be happy to help yours too.