No matter who you ask, you’ll find that Singapore has a reputation for being incredibly start-up friendly due to its lenient government policies and ample chances for private funding. It’s no wonder that the city-state is considered the foremost business hub in Asia. In fact, you too might see an opportunity ripe for the taking in Singapore and may want to start a company here too.
The first thing you’ll want to do to ensure a successful business in Singapore will be to get incorporated. Unfortunately, business owners tend not to treat this process with its due consideration, inevitably causing issues for themselves that turn out to be very expensive. Here are some of the most common mistakes made when incorporating a company and how to avoid them.
1. Launching your company without proper preparation
Launching your business is a very exciting time for anyone. However, timing must always be taken into account as a critical element for any company’s success. Launching a company too soon is one of the most significant errors made by entrepreneurs in Singapore. This could be the result of several things, like a need for more research or a failure to comprehend the regional market.
Entrepreneurs should first conduct research and arm themselves with the essential information needed for business launching before diving into your company. To do this, they can either hire a business consultant or sign up for one of the many start-up mentorship and coaching programmes available.
2. Seeking too many funds too early
A start-up’s search for outside capital is a laborious and drawn-out affair. To streamline this process, you should carefully and sensibly determine your fundraising requirements and only gather the required funds.
When you seek too much outside funding too soon, you frequently end up transferring a considerable amount of your company’s equity to external investors. The valuation of your firm would be lower the earlier in its life you are. After a firm raises less money initially, its co-founders will probably own more of the business when it is sold.
Early investors acquire ownership during a time when your firm has little value, enabling them to purchase a more significant stake for each dollar invested than they otherwise would. Naturally, no early-stage firm will be able to predict its burn rate precisely, but you should make an effort to thoroughly assess your financial requirements and secure funds in accordance with that estimate. Utilising debt rather than equity is another important tactic. Essentially, it’s better to borrow money rather than sell your equity.
3. Failure to secure necessary business licences
A business license and incorporation are not the same things. Companies must obtain the necessary licenses to avoid complications in the long term. Luckily, the licences are typically inexpensive and straightforward to attain. Find out what kind of license your business needs and buy them now to prevent paying excessive fines.
4. Not complying with local regulations
A business is not exempt from local regulations because it’s been incorporated. If you want to incorporate and operate a business, it is vital to comply with the regulatory guidelines set forth by organisations like ACRA (Accounting and Corporate Regulatory Authority). A company could lose a lot of money in unpaid taxes, fees, and fines if it doesn’t follow these rules. The business could even potentially get padlocked as a result.
Starting a new company in Singapore is a smart move with its governmental benefits and strategic positioning in Asia. However, business owners are still prone to making the mistakes listed above.
Fortunately, a comprehensive understanding of these faults is usually enough to mitigate any adverse effects. Beyond that, Express Corporate Services, an exemplary corporate service provider in Singapore, is here to assist you if you require professional guidance or advice as you launch your start-up in Singapore. Contact us today to learn more!