Your Startup: Practical Advice For The Early Days

Welcome to the third of our three-part series on ‘Starting Your First Business’. In this post, we outline practical advice you’ll need to successfully navigate your startup business through its early days.

Congratulations! You’ve made the leap into entrepreneurship and started your own business. It’s an exciting time and, while there’s still a lot of work to be done, we know you have what it takes to navigate your way to success.

To help you make sense of the first 100 days of your startup, we spoke to our panel of successful business owners, who shared with us personal insights from the early days of their business journey.

Ready to find out more? Let’s jump in.

Being Hands-On

In the beginning, it’s important for you to maintain a hands-on approach, getting involved in as many aspects of your new business as possible. This was a point that was emphasised by each of the business owners we spoke to.

Dr. Terence Tan, founder of The Pain Relief Clinic, recalled how he got his clinic off the ground. “As a startup, you have to do everything yourself. From setting appointments to renovations to marketing, I was involved in it all.”

Mr. Vincent Teoh, founder of Zoo-phonics Asia enrichment centres and the Safari House chain of pre-schools, echoed this sentiment too.

“As an entrepreneur, you must be able to rough it out. There is a need to stay hands-on, being able to handle long hours, and do the things nobody wants to do,” he explained, highlighting the need for founders to roll up their sleeves to get things done.

In Separate Company

So why is incorporating a company such a popular choice for businesses in Singapore?

One big factor is that the company is a legal entity separate and distinct from its shareholders and directors. What this means is that the shareholders and directors are not personally liable for the debts and obligations of the company.

Francis Chan, Deputy Head (Disputes) of the Rajah & Tann Legal Basix Practice Group, shared the following view: “While sole proprietorships and partnerships have less compliance formalities than private limited companies and cost less to set up, you or your business partners can be sued personally and be made personally liable for the mistakes made by the business.”

Mr. Lawrence Chai, founder of 3E Accounting, also advised, “As a Sole Proprietor or Partner, the profits of your business are your personal income, of which the highest tax bracket currently is 22%. In comparison, companies are taxed at up to 17% only. Thus, incorporating as a company may save you some tax dollars in the long run.”

Permits and Licenses

Depending on the nature of your business, you will need to apply for various permits and licenses from the authorities in Singapore. While in the past, one had to apply for individual licenses from each official body, today it’s much easier with everything consolidated online through the GoBusiness portal.

Vincent shared, “For businesses like ours, you need to hire employees before you can get your permit to start operations. You also need to train them before they can start. So, make sure you have sufficient cash flow for overheads such as rental and staff in the meanwhile.”

Some businesses take up to one year to set up due to the licensing process, so it’s important to budget for enough resources to tide through the initial phase.

Setting Up Premises

On assessing suitable locations for his restaurants, Mr. Jonathan Yang—Co-Founder of Muchachos and The Daily Cut restaurants—learnt that an entrepreneur should not think that he can change consumer behaviour. Instead, he has to work with existing consumer behaviour.

“We learnt that if consumers did not gravitate towards an area physically, we should not think that, by virtue of our opening, they would just start going there.”

The merits of a good location have to be balanced against rental costs. Vincent opined that you should consider carefully if you really need an office in a prime location, if it is much cheaper to choose a location outside the CBD. He chose to set up his main office in Jurong.

Other times, sharing an office can be a cost-efficient way to get going too. Dr. Tan revealed that he started out by renting space in another clinic in Ngee Ann City. It was only after he hired his first staff member around the one-year mark that he moved into his own clinic premises.

Another key aspect to look out for when setting up is understanding the type of usage your intended location is zoned for by the Urban Redevelopment Authority (URA). If your location is not zoned for your intended use, then you need to apply for a change of use, which is subject to approval. All of this should be kept in mind before you rush into signing any leases or tenancy agreements.