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Singapore is already known for its ease of doing business, low-tax policies, and first-world infrastructure. Moreover, buoyed by government support and the availability of private funding, the city-state is well on its way to emerging as Asia’s hub for incorporating start-ups.
This is especially so in clean and green technology, media and entertainment, IT and electronics, and biotechnology, among others. However, starting a business comes with an inherent price.
As someone has said, if you are not making mistakes as an entrepreneur, your business is probably in big trouble. This is because innovation is all about risk-taking abilities; it’s all about experimentation, it’s all about making mistakes.
While some mistakes are inevitable, you can learn from them and move on. Other mistakes can be avoided if you plan properly and do your due diligence. These may include not building a strong support team, not getting along with co-founders, hiring too quickly, or hiring incompetent staff, or just putting a half-hearted effort into making the start-up successful.
To help all the budding entrepreneurs with the salient points they should always keep in mind while thinking of incorporating in Singapore, we present a comprehensive guide below.
Common Mistakes While Incorporating a Start-up in Singapore
Founder(s)
Single Founder
Go solo by all means but bringing in a partner or two may help highlight some blind spots you may have ignored while envisaging the initial idea. If you insist on going alone, then at least build a support system of trusted advisers and mentors who may look at the business idea objectively.
Clash Between Founders
The flip side of listening to outsiders too much or having co-founders is that it may either distract or discourage you. Clashing personalities of co-founders, having alternate visions for the business growth, or just being on different wavelengths while making day-to-day business decisions may lead to clashes and untimely closure of the company.
Half-hearted Effort or Working Too Hard
If you don’t put in your entire self in making the start-up succeed, no one else will. It’s sometimes beneficial to quit a stable job and take the risk associated in building your own company. When you have nothing to fall back on, you better make the start-up work. On the other hand, working all the time will bring stress, which may burn you out quickly.
Launched Too Early or Too Late
It can’t be emphasised enough that timing is everything in today’s business. If you see potential demand for a product, don’t wait, or you may miss the bus because, chances are, someone else might have seen the demand too and is already working on the launch.
Tip 1: Don’t confuse a good idea for a good business.
Always remember that you need to follow up a great idea with even greater execution to make it a successful business. Invest in independent market research which gives you accurate data. You may find that the market is not yet ready for your product. Or may be your idea isn’t as original as you thought.
Bad Location
Too Much Competition in the Area
Imagine opening an Indian restaurant in a nearby neighbourhood street. However, you realise afterwards that that particular street already has two restaurants serving Indian dishes. You may still get some customers but it is nothing compared to what you have got if you were the only one in that area serving Indian dishes.
Tip 2: Think different.
Just copying the latest fad will not get you anywhere. For instance, with Tiktok’s success, it may not make sense to create another similar application. Invest in researching the reasons why a product has caught people’s imagination. Too many new companies try to force a product to fulfil the “supposed need” of the masses.
Poor Finance Management
Raising Too Little or Too Much Money/Poor Investor Management
Every start-up needs cash. But caution must be exercised while raising money. Giving up too much equity in initial stages is not a good idea. Even if you do, make sure to protect your interests and have “controlling rights” of the company if you are the main brain behind the idea.
Spending Too Much in Initial Stages
Don’t even think about scaling up before you have achieved product-market fit, or solved the teetering problems. “Growth hacking” is mandatory nowadays, but to do that for a product that isn’t quite ready for bigger scale, can do serious damage to your brand-building in nascent stages. Scaling up should be an iterative process. Do it only when your product has achieved its product-market fit.
Hiring Too Early/ Hiring Incompetent Staff
This comes from the argument about having a great support staff around you. You can’t do everything by yourself, nor should you even try to.
Less Stress on Branding or Marketing
Even an awesome product will not sell unless people know about it. Always set aside your marketing budget in the beginning. Remember even great directors like James Cameron (of billion-dollar Avatar fame) start marketing their movie at least six-months before the release to ensure enough people know about their product in advance.
Tip 3: Don’t over-value positive feedback.
Some start-ups tend to over-value positive feedback from prospective customers. Always remember that if a potential customer spends a lot of time exploring your product but shies away from eventually buying it, you have built something intriguing but not compelling or useful enough. Thus, to succeed, you will need an eagle-eyed focus on creating a must-have product.
Customers
Marginal Niche or No Targeted Customers
For instance, you went to Canada for vacations and loved ice-skating. On your return you come up with a great idea for durable ice-skaters. But the question is how many people would be interested in buying ice-skating gear in a tropical country like Singapore?
Worse still, you don’t even do basic research on potential customers and invest all your savings in making the ice-skating products. The business was bound to fail even before it was conceptualised.
How to Avoid the Above-Mentioned Mistakes
Just ponder on the questions below and you can avoid most of these.
- Are there any business risks associated with this start-up?
- Does the product have clearly defined applications and a definable market or target customers?
- How much finances are needed and how to raise it?
- What will be the initial valuation of the company and will private investments be needed for future growth?
- Who will own the intellectual property (IP) rights, if any, of the product?
- When will the first product be launched? How to scale-up henceforth?
- What will be the roles and responsibility of founder(s) in the existing set-up, as well as in the long run?
- What will be the future of the start-up? Whether it will be a small yet sustainable business, grow as a private company, or position itself for acquisition? Going public is also always an option!
Of course, you can also enlist the help of a local company incorporation expert, such as SCI, to assist you in the incorporation process!
Related Reading » Top 5 Rules on How to Become Successful
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