The idea of starting one’s own business is often coupled with either excitement or trepidation. There’s excitement about seeing an idea turn into a product that sells or a service that becomes highly sought for; but there’s also trepidation about what happens when this idea doesn’t work. Startup entrepreneurs perpetually ask a lot of “what if” questions in their minds: “What if I fail?” “What if I succeed?” “What if the market changes?”
It’s this conundrum that sometimes saps the enthusiasm of enterprising individuals to foray into the otherwise rewarding and exciting world of entrepreneurship.
All hope is not lost. Whether you’re starting as a sole proprietor or incorporating a private limited or partnership, there’s always room for everyone to succeed, even for first time entrepreneurs, if you incorporate your business in Singapore the right way.
In this article, we’ve rounded up 8 painful mistakes most people make when starting a business.
Featuring words of wisdom from entrepreneurs and thought leaders from around the world, we hope this list will help you, aspiring entrepreneurs, enter and navigate the waters of entrepreneurship with success.
Mistake #1. Thinking That a Good Idea is Good Business Idea
All businesses start with an idea. But not because an idea is good means it’s likely to succeed as a business.
Idealab Founder Bill Gross who has founded hundreds of successful startups, and is incubating hundreds more, taught there are many factors responsible for the success or failure of businesses. Timing is one such factor. Demand is another.
When good ideas respond to a timely demand, a disruptive innovation takes form. Take the case of the ride-hailing app Uber. You probably have heard of the Uber story by now, how on a snowy night in Paris in 2008, when founders Travis Kalanick and Garrett Camp had trouble hailing a cab, the idea of tapping a button to get a ride came to mind. And the rest, as they say, is history.
So do you think you have a good idea? Don’t just jump into the water with it. Test it against market demands, timing, pricing, competition and see if it would ride the waves of opportunity for you.
Mistake #2. Cutting The Employment Line To Jump Into Entrepreneurship
Should you leave your day job to focus on your new occupation as entrepreneur? The clear answer is yes, by all means. Starting a business could entail rigorous 80-hour work weeks. If you want to succeed, you should devote all the TLC (that is, tender loving care) your new company deserves as much as you would give a newborn baby.
The not-so-obvious question, though, is just when to leave employment. Fortune shares an interesting take on four questions to ask yourself before deciding to quit your job to venture on your own, and in summation, these questions will help you focus on these four things only: your readiness to work harder, to be flat-broke for a few years, for your idea to become marketable, and your readiness to step out of a routine.
We suggest a careful balance that will ease you into the transition from becoming an employee to becoming your own boss.
Staying employed will help you with cash flow, a much needed resource while you’re nurturing your business. At the same time, you will have to split the time between doing well at work and doing better in your own company. They say you no one can serve two masters, but not for a creative and resourceful entrepreneur who is fuelled by passion to make a difference.
Mistake #3. Not Hiring A Company Registration Firm From The Beginning
Now that we have covered some of the above-the-line concepts and principles for entrepreneurs, the next thing to tackle is the inevitable part of company incorporation.
Many entrepreneurs run into the pitfall of not hiring a professional corporate services firm upon inception. They think they would save money by doing things on their own instead of paying a service provide. This is wrong for so many reasons, and we’ve listed the obvious ones below.
Professional firms offering incorporation services cut down the costs of time and money that a new entrepreneur would have spent by doing things on his or her own. Read below to know why.
Mistake #4. Incorporating The Wrong Type Of Business
Are you registering a sole proprietorship, or a private limited company? Do you have taxable products for sale? Or can you operate tax-exempt?
The Accounting and Corporate Regulatory Authority of Singapore (ACRA) provides essential information on the business structures which you need to know about before deciding to set up shop. It is important that you choose the correct structure to avoid tax compliance issues in the long term.
Mistake#5. Not Knowing That Certain Businesses Could Be Tax-Exempt
Singapore has consistently ranked in the World Bank’s ease of doing business survey for the past years. And it’s not just the infrastructure that makes it easy to do business in Singapore, it’s also because the government through the Inland Revenue Authority offers tax reliefs for qualified start-ups.
Mistake #6. Starting Big with Costs
Do you really have to rent a space to start selling your products or offering your services? Or can you attract customers using free online platforms? A lot of entrepreneurs make their millions by starting with minimum spending. What’s important is for you to know where to put your money.
For instance, one first time entrepreneur would “save” money by doing his own books of accounts, when that takes away so much of his time for business development. Outsourcing to professional corporate secretarial and accounting firms makes an entrepreneur’s job a lot easier and ensures compliance as well.
Mistake #7. Not Giving Importance to Compliance
Your negligence to comply with statutory reporting requirements today will have far-reaching negative damages for your business tomorrow. Make sure to keep a straightforward relationship with government authorities in terms of tax payments and other reporting requirements (Annual General Meetings, Financial Year End, etc.) from inception.
Mistake #8. Thinking About Profit and Profit only
Ever heard about sustainability? It’s the idea of not taking more from the planet than what you could give back. Most big multinational companies, like Unilever, incorporate sustainability in their operations by adopting zero-waste to landfill practices across many of their production facilities.
Successful businesses consider their environmental and governance impacts and strive for sustainability in their operations.
In June this year, The Singapore Exchange has also announced its “comply or explain” policy for listed companies on their sustainability reporting. Beginning 2018, the bourse will require listed companies to conduct an annual review and reporting of their sustainability impacts, in terms of how their daily operations integrate environmental and governance considerations throughout the supply chain.
You might think, why bother about what the SGX mandates when you’ve just started today and you probably won’t go public in a many years? Yes, you may have a long way to go before going public, but if you don’t incorporate a sustainability consciousness now, then it might be hard for you to “invent” it when you’ve eventually gone public and are subjected to the reporting rules. Besides, businesses that are built to last have sustainability running in their veins, so to speak. Do your own research on the big and long-running companies in the world and you would know this to be true. Start with this list from Forbes.
There you have it, a list of 8 painful yet common mistakes people make when setting up their own business. Robert Kiyosaki said that entrepreneurs must have the courage to fail. But why fail when you can learn from others’ failures, and chart your course differently?