How to set up a new business in Singapore?

Setting up a new business in Singapore

Recently, I advised a group of people who have been working for the past 5-7 years in an office. Their job range from back end to middle office and they told me that they are really sick of their job. They can't wait to break free and they would like to try running their own business. However, they have no idea how to do that.

I ran through with them their raw ideas and I realised that they do not have a clear structure on how to set up a business. The key thing is, you should not jump into setting up a business simply because you are bored of your job. You will need to think through and plan.

The following steps are what I got them to do before deciding on kicking off their business and I thought it will be interesting to share here:

1. Think through your key competencies (your KSA - knowledge, skills and abilities)

2. Decide on your competitive advantage based on your core competencies

3. Envision where your business will be in the future

4. Decide on your business's identity (What will the business represent? what will be the value add to the society and the consumer?)

5. Research on current market situation (both micro --> your strength and weaknesses and macro --> the economic situation, changing trends etc)

6. Strategize to achieve your vision and mission (You can follow the 4Ps strategies to have a clearer idea -->

-- product / service: what are you selling? Why would people buy from you? What is the core advantage that you are offering to your consumer? How are you going to package? Why? Are you providing any ancillary services?

-- price: how much are you going to sell your product or service at? Why? 

-- place: where are you going to sell product? How much is the rental? Is the fixed cost too high? How long can you hold out with your capital? Have you explored digital space?  

-- promotion: how are you going to promote? Through which channel? would it reach your target audience? How much budget do you have?

7. Come out with ways to measure and quantify your business (Are you going to only focus on financial perspectives or are you taking into account other KPIs such as customer perspectives (like retention rate, satisfaction rate etc))

You should also assess your business and know if you are going to start a sole proprietor, partnership, company or?

Done with brain storming all those mentioned above? Eager to start your business?

The first step is always to register your business with ACRA

ACRA has an informative page on how to start a business -- https://www.acra.gov.sg/components/wireframes/howToGuidesChapters.aspx?pageid=1755

Backward looking = reflection, forward looking = solutions!

We should only spend 20% of our time looking back to reflect and learn from past events and the rest of our time looking forward to find solutions.

Many people I know spent too much time looking back and asking the "whys" instead of channeling their energy into looking forward and solving the problems. Start today by spending majority of your time looking forward!  

Business Requires Transparency and NOT intransigence

Transparency:

Regardless of whether it is towards your employees or customers, every business requires transparency. The inability to be transparent towards your employees or customers will only cause more issues in the future.

I have learnt along the way that the inability to be transparent has led to more problems in the long run. I always thought that if sensitive information is not shared or disclosed, it might be better for both sides. However, some of the times, it is important for us to disclose to the employees on certain things such as revenue model so that they will know how they are value adding to the customers. Some times, we got lazy and we decided not to disclose certain information and this might also lead to potential bottlenecks in the future.

Intransigence:

One of the worst things that can happen to a company is when agreements cannot be met due to intransigence. No one would gain from prolonged insistence on their own stand. Many businesses have lost deals or huge revenue because they are not willing to compromise on anything.

I used to have an employee who is always quick to point finger at someone else whenever things happen. He can come out with many reasons why things go wrong due to other people. No common agreements can ever be reached in the company when he leads the meeting as he is always making an extreme decision and expecting everyone to follow. While devil's advocate is good, the inability to listen to others and compromise is a big NO NO! Eventually, the whole company spent too much time debating and hence became unproductive. As counselling and coaxing did not work out, he was subsequently asked to leave.

As such, it is really important for a business and also a person to always be transparent and not intransigent.

Ideas? Stories? Share with us! We Want to Hear You!

Valerie Chai
www.starcresto.com

Do you think that focusing on getting too many government grants is a setback in business? Would that make you lose focus on what your business should really offer?

Government GRANTS -- Vice or Wise? Are you over focusing on chasing for grants and not spending time on building your business? 

Recently, I get to know of an entrepreneur who is running her own business based on grants. She is very focused on spending almost ALL her time looking for different grants and thinking of how to get more money from all the different grants from the government.

What puzzled me is ---> WHY? Why spend so much time thinking of ways to get grants from the government rather than focusing on building up the business?

The grant from government is helpful for entrepreneurs who aspire to run their own business but do not have the resources to. PIC grant is such grant which has helped many entrepreneurs in terms of getting their systems and hardwares. (you can read more about PIC grant here --> http://entrepreneur-weekly.blogspot.sg/2014/05/what-is-productivity-innovation-credit.html) However, relentlessly pursuing different grants seems pretty pointless to me.

I guess the most important thing in running a business is to have clear vision and values. Once you are very clear on those two, then the next important thing is the ability to execute through planning and strategy followed by measurements and feedbacks of results. I realised that some of the entrepreneurs do not know what they want in their business. They seem to be more focused on getting cash from the business by applying for different grants. While, this might seem as a smart move by some, my question to them is --> is this sustainable?

It is more important to build up a strong foundation for your business and think of a sustainable revenue model (yes its gonna be tough but doing things the short cut way also means that there might be little or no sustainable cash flow for the company in the future).

Your thoughts? Share with me! 

About Valerie Chai

I am the founder of starCresto Education Group (starCresto). 

starCresto was founded in year 2000 and has expanded over the years from tuition to tuition agency to enrichment courses to mentoring. I am born in a poor family and I guess that gave me a lot of drive to succeed and get out of poverty cycle and most importantly, the rat race that so many people are stuck in. I believe strongly in human capital and talent management. 

The business journey has not been all that smooth sailing with great lessons learnt from mistakes made. With all these learning, I live by my three rules in life now:

1. Think strategically

2. Behave optimistically

3. Execute courageously

Success is a matter of chance or choice?

CHOICE OR CHANCE?

Are you determined to succeed or are you leaving it to chance or destiny? Even though it is true that success might require luck and chances, the determination and choices that you make will make you successful when the chance arises :) 

CHOOSE to succeed and charge!! 

Entrepreneur Weekly - Triangle model of BUSINESS that involves ACTIVE and PASSIVE business sections

In all businesses that you do, it is important to build up a triangle that consists of a stable base and a risky tip. I call it the A + P = S model (Active + Passive = Success)

(c) Valerie Chai. ALL RIGHTS RESERVE 2014

To build a successful business, there is a need to build up a strong base of repeated business that requires very little involvement and yet gives you strong repeated cash-flow. This strong base of cash-flow allows you to take on more risky deals that can potentially give you higher ROI. If the risky projects fail, you know you always have the passive income that you have built up to cover your losses. 

Talent Management

The next question I usually get when I share this model will be --> "So what type of employees should you use for passive and active business section respectively?"

Well, it is always good to have your trusted, loyal, stable, efficient and not so adventurous employees to help you manage your business portfolio that are passive in nature. These employees should be remunerated for their loyalty and efficiency. It is important to ensure low turnover for this business section. 

The active business section requires the employees to be a risk taker, solution creator, problem solver and good sales person. However, employees who are in this section tend to be those who job hop very often and they could even learn whatever they can from you and bring it over to your competitors or even set up another company to compete directly with you. As such, it is important for you to include non disclosure agreements and non direction competition for a few years with these employees. However, it is still very important to groom, empower and trust these employees. These employees should be remunerated on commission basis and could even be groomed to be part of the partners if they prove to have the potential.     

Opportunists are usually entrepreneurs