With its strong infrastructure and support for entrepreneurship, Singapore is a great place to start a business. However, starting your own business in Singapore takes hard work, dedication and passion. If you are planning to start your own business in Singapore, here is a step-by-step guide for you.
1. Identifying your target audience and their needs
You need to have a clear idea about your target audience and their needs before you launch your business. Focus on the customer and what they potentially want from the product or service you intend to offer. Here is a list of questions you need to ask:
- What is the purpose of your product or service?
- What are the benefits of using your product or service?
- How is your product or better than your competitors?
A good resource for you to get inspiration for ideas is on Quora. You can see all the questions people are asking, and some common challenges faced by these answer seekers.
This becomes excellent insights for you to develop your unique solutions to help them solve their problems.
2. Identify your business proposition
As you plan your business, you should have a clear view of what you want to do.
Be specific and precise about the type of business you want to start, the location of the business, or your target audience.
One of the best frameworks that can help you is the Lean Business Canvas. Widely used by entrepreneurs all over the world, it helps you to visualize your idea and your business model.
Once you identify challenges and problems faced by your target customers, you need to research on potential competitors for your planned business.
With customer and competitor research out out of the way, start looking into the product or solution you want to develop. Think about how your product or solution benefits your customers, connecting it to your customer’s challenges. Develop strong differentiation factors from your competitors allows customers the reason to pick your product or solution.
Editor’s Note: Get started on ideating for your business and product with this nifty guide!
3. Decide on your business location
After you have figured out your business idea, think about where you want to operate your business. Common places to start a business include the following:
- Home-based: If you plan to test your business idea or keep your business small, you don’t need a separate office space! You can start your business from home. This allows you to save money on rent. Besides saving money, you get to spend more time with your family. That’s a win-win!
- Co-working space: If you need to separate your work and living space, a co-working space such as WeWork is your next option. Many co-working spaces are set up with the intent to help you to start your own business. Being in a co-working space gives you an opportunity to network and interact with like-minded entrepreneurs. You can seek out feedback for your business idea, or even find your business partners.
- Retail: If you plan to start a retail business, make sure that you have sufficient capital to invest in the business. You need the capital to purchase inventory and pay for the rent of your retail space. There are many types of retail spaces available in Singapore. Popular ones include shopping malls, shops in heartland neighbourhoods or even shophouses in heritage districts. The choices are aplenty. In addition, you need to set aside budget for interior design and a contractor to beautify your shop.
4. Develop a business plan and find your startup capital
As you prepare for your business, make sure you develop a complete business plan. Building a business without proper planning is like building a house without a blueprint. With the right business plan, you will have visibility of your targeted goals, how you will operationalize your business and the capital you need.
When you are starting out, it is better to start small and build on your business step-by-step. Even if your startup has potential, it may take time for you to see significant results. Having said that, there are some companies that start off with an idea and grow rapidly from there. To find out how much capital you might need, check out sites like Crunchbase and Flippa. On these sites, many founders share the cost structures of their business.
If you plan to raise funds for your business, check out sites like AngelList and Crunchbase for potential investors interested in your product.
Editor’s Note: Explore how you can seek out microfinancing options to raise the funds you need for your business!
5. Registering Your Company in Singapore
Once you have your business plan ready, it is time to register your company in Singapore. You can easily register your company online.
All businesses will need to be registered with the Accounting and Corporate Regulatory Authority of Singapore (ACRA). If you are thinking of operating a micro-business, you can consider registering a sole proprietorship instead of a private company as the registration process is easier and the maintenance is cheaper.
If you want to register a private limited company in Singapore, there are 3 things you need to provide ACRA.
- Business name: You need to provide a unique name legally approved by the ACRA. Choose a name that is short, easy to remember and relevant to your business. You can try using free name generators online if you need some ideas.
- Business address: An address is also important because it helps other people to connect with your business. If you are just starting out, you can register your business with a virtual office offering mail services.
- Nature of your business: The full list of the Singapore Standard Industrial Classification (SSIC) code corresponding to your business activity is issued by the Department of Statistics of Singapore. Your business activities must fall under one of the pre-defined classifications. On top of that, you need to provide additional information to elaborate on your chosen classification.
Editor’s Note: Need help choosing your business name? GoDaddy’s got you covered here.
6. Familiarize yourself with the Inland Revenue Authority of Singapore (IRAS)
Once the process of registering your business in Singapore with ACRA is done, you do not need to register with the Inland Revenue Authority of Singapore (IRAS).
However, familiarize yourself with the reports and statements IRAS need to receive from you while you are operating your business in Singapore.
Furthermore, there are various tax reliefs for startups that can help you get off the ground during the first few years of business. All companies with an annual chargeable income of under SGD100K will only have to pay 25% on their taxable income of 17%.
For example, assuming your startup earns SGD80K in taxable profits (i.e. after deducting any deductible expenses and investments from your company’s gross profit), during the first year of operations, your company is only liable to pay 4.25% (i.e. 25% of the corporate tax rate of 17%), or SGD3.4K in corporate tax for that financial year. Once your company is incorporated in Singapore, you can check with IRAS for additional tax relief packages.
7. Setting up a business bank account in Singapore
After you have registered your company, the next step is to open a business bank account. Setting up a business bank account is easy and can be done within an hour.
Opening a business bank account helps you keep your finances organized. The account will also act as a single point of reference for all your business transactions.
Even if you are planning to operate as a sole proprietor, you should still set up a separate business bank account. DBS, OCBC, or UOB are some of the largest banks in Singapore and you can bank on them (pun intended!) if you operate a business in Singapore.
Alternatively, you can also consider opening a virtual bank account with Payoneer, Skrill or Wise. These are suitable for e-commerce and freelancing businesses. You can receive payments from worldwide buyers in their local currencies. Exchange rates are also mostly competitive on these platforms, hence allowing you to avoid exorbitant charges.
Ready to start your business in Singapore?
With these steps, you will be able to start a business in Singapore and overcome the initial hurdles. The best thing about starting businesses in Singapore is the widespread availability of resources online. When in doubt, Google what you need! Besides utilizing search engines, you can also check out the following government sites:
Both of these sites contain all the necessary information about different business activities you can do in Singapore.
Good luck in starting your business in Singapore!
Editor’s note: Got questions about putting your idea online? Get instant answers on GoDaddy Asia Facebook Messenger now.