In 2019, there were approximately 219,000 small enterprises in Singapore, making up 99% of all domestic companies. 50% of the national GDP last year came from SMEs, a clear indication that this sector is at the core of the national economic growth. Given these facts, it’s safe to assume that entrepreneurs have plenty of room for growth and opportunities to establish a small business in the Republic this 2020.
That is why if you are looking to set up a business venture in this country, now is the best time to realize your visions. This article should give you a head start of how the process would look like.
Step 1. Create a Business Plan
According to Alejandro Cremades, author of The Art of Startup Fundraising & Serial Entrepreneur, business plans don’t have to be complicated. “Keep it simple,” he said in a Forbes article. Plans are crucial to keeping things organized. If you’re planning to apply for an SME loan Singapore or raise funding for your venture, ditch the old-school business plan format and create a document that people would easily understand.
Step 2. Consider the Financials
When starting a business, the rule of thumb is to have enough funds to keep your business operational for six months without including your potential earnings. The funds should consist of the following instead:
- Capital Costs – This is a one-time expense that you’d need to shell out to start a business. This covers your marketing materials, such as the signage and website, as well as the rental fees for your office space.
- Fixed Costs – Fixed costs are the expenses incurred while your business is in operation. This covers the utility bills, employee wage, and logistics, amongst other expenses.
- Emergency Funds – Unforeseen expenses are typical in start-ups, so you should have emergency funds to keep your business in operation in case of unexpected events.
When figuring out your finances, take a moment to consider if it’s worth it to use up your life savings. You can also consider borrowing money from an SME lender in Singapore.
Step 3. Choose Your Business and Domain Names
For the business name, check BizFile to ensure that yours is unique and has not been used by another entity. It helps to keep at least up to three business names, so you have backup names in case your first ideas aren’t viable.
Also, it is imperative for businesses these days to have an online presence. You want to secure your online business domain name in case another user is interested in your chosen domains.
Step 4. Select a Business Structure
When choosing a business structure, you may want to consult a legal representative to ensure you’re making an informed decision. Your options are:
- Sole Proprietorship
- Partnership
- Corporation
- S Corporation
- Limited Liability Company (LLC)
Step 5. Sort the Tax Obligations
Learning the basics of corporate income tax is a must for entrepreneurs, even if you plan on contracting an accountant down the road.
Step 6. Set up a Business Address
Unlike in other countries, Singapore requires businesses to register an office address. This is necessary for all business correspondence. As an SME, you have the option to register your private personal address instead of renting or building a space. This will help you save on capital costs, especially if your venture doesn’t need a physical office to operate.
Step 7. Proceed to Registration
After completing the steps above, it’s time to register your SME officially. You can personally visit the ACRA to submit the requirements or have a legal representative assist you in this step.
The road to entrepreneurship is never a smooth one. No matter where in the world you set up a business, you’ll tackle challenges before you hit the road to success.