Common Startup Mistakes Entrepreneurs Make in Singapore
- Posted by Lee Bon
- On 28.03.2017
Most of what I learned as an entrepreneur was by trial and error.
– Gordon Moore
Singapore is a perfect place to start up: outrageously low taxes, full governmental support, the high-end infrastructure, massive groundwork done in tech startups, crowds of investors, business-oriented and smart manpower… Nevertheless, Singapore’s benefits do not protect you from making mistakes in business. Because mistakes come from people’s heads, and the business is basically about taking risks and experimenting with different innovative stuff. You just cannot discover cool ground-breaking things without risking everything you have. To ensure your mistakes come from a healthy adventurism, not ignorance, we offer you to think about these common pitfalls that may await you on your way to success in Singapore.
Wrong founders to go with
Human Factor: mistakes happen when you work in a team as well as when you go your entrepreneur way absolutely alone. People = minds, and these minds can either push you forward or make you a hostage of irresponsible people disregarding their duties or someone’s clashes.
Going alone has its benefits if you are very experienced and know all ins and outs of incorporating in Singapore. But if you are a newbie here, it’s better to involve partners who are able to assess the situation objectively, on the third hand, and drive home a point or two when you miss something crucial.
Do not invite personalities (co-founders) with polar values and visions to one team. Even if they are hyper talented, they will rock your company boat and distract you from your strategic goal. The startup is for 100% like-minded people. If you aren’t sure you have the talent to mesmerize your co-founders with your idea, don’t take “inflexible” people on board; otherwise, clashes will ruin your startup.
The founder must infect his team with the idea and show the example of hard-working and devotion. If you don’t make the project your priority, nobody else in your team will! People tend to make more effective, full-hearted efforts when they have nothing behind them. Quit your another job you rely on to make your startup your ultimate source of income for a better motivation. Do not exhaust yourself and your team: your startup is a long race.
Neglecting marketing analysis
Study your market all the time to know the demands and figure out the best time for the launch. Maybe the market isn’t ready to perceive your idea today or you should develop your idea to make it more outstanding and save it from getting lost in the ocean of similar ideas. Bide your time and keep developing. If you clearly see the demand, act fast! Because not only you have noticed it, but you can be the first who comes up with the product! Do not rely on solely your understanding what people need. The high-quality market research will enable you to see the ropes you didn’t see before.
For example, your “wow” product can excite very positive emotions of your buyers, but if they hesitate to buy it in the same time, it means your product didn’t hit the target. Do not be deceived by emotions, but do the research and polish your message until you create a really useful product everyone is eager to buy.
Bad legal entity choice
Singapore supports different kinds of business structures, and it’s easy to get mixed up. They vary a lot and have both benefits and serious drawbacks or limitations you cannot change afterwards. For example, if your business is connected with risks, you shouldn’t start up using the business form which legal entity is connected (or the same) with your own (like it is for the Sole Proprietorship or the Branch Office) because this way you will be liable for your startup’s failures with your personal assets. The Private Limited or the Subsidiary would be a good choice instead because they are limited liability firms where the paid-up capital is the limit of your personal liability as a founder.
Taxes are another item that must be calculated well before registering the startup. Despite Singapore has one of the lowest corporate taxes in the world (17%), this tax can be totally avoided in some business structures (the Branch or the Limited Liability Partnership or the Sole Proprietorship) if economy means a lot for your startup.
Ask yourself whether there are some potential risks for your business. What is more important for you (on this stage): economy or safety? Enlist consulting of the expert incorporation team to protect your business from frustrations in the future.
Wrong workers to go with
The fact is that you rely on people who can do different stuff you cannot. But even if you can – you cannot anyway because you cannot be everywhere at once and shoulder any possible task. Delegating work is a great success rule for business. How to find the right guy for the task?
Lilian Vernon – the mega-successful businesswoman who ignored conventional marketing approach and trusted her inner voice in developing her products – once said: “The biggest mistake was that I didn’t hire all the right people. I should have done better reference checks. I should have defined the roles in a much more professional manner. I hired people who just couldn’t do the job.”
Today’s business walked away from such intuitive style, and the big data define success. Probably this refers to HR as well: test your workers before hiring them. Don’t believe their aura.
Scanting marketing budget
The more people know about your product, the more sales you will have. This is the today’s business axiom you cannot argue with. You are either in the saddle or under the horse. Start promoting your products well before the release day, never save on branding, and wring the maximum out of social media. Set apart funds for your marketing campaign in the beginning.
Issuing too many equities in the very beginning
Little money is a problem, but involving too many shareholders exposes your business to a risk: you can lose control of your startup (unless you take care of securing some controlling shares). Don’t overdo when raising money. Stop on the paid-up capital that is enough for developing your product and introducing it to the market. As soon as you achieve a steady position in the market and you satisfy the demand in your niche, you can think about scaling up.
Mistargeted product or wrong localization
Like no fur coats will be bought in Africa, there are certain products that won’t have success in Singapore. Because of not only the hot climate, but also lots of factors such as laws, mentality, traditions, and so on. Study the local market carefully before moving on to developing your product. Ensure there are customers that will snatch your product right out of your hands in Singapore. Sometimes it happens that the product is great, but you just pop up with it in the wrong place (for example, crowded with competitors or just inappropriate). It’s hard to force your way when there are already 3 similar coffee shops on the street where you decide to open your own one.
Singapore offers strong business consulting services. Involving local consultants will help you to save a tremendous lot of time and map out a more precise strategy for your startup. Do not grope about blindly where you can make bold and confident steps using a high-quality market research. We wish you a well-strategized starting up in Singapore!