Friday, September 26, 2008

Steps to forming a business of your own

If you want to be an entrepreneur, welcome to the crowd. Every month there are thousands of people creating new businesses around the country but to start a business can be a complicating, risky effort. Only about 60% of these businessmen survive for 2 years and less than 50% of them survive for at least 4 years, according to a study by the U.S. Small business Association.

A typical business setup will include the following considerations. However, you can always look for a business consultant or an online free advice on how to prepare for it :

1. Am I an entrepreneur or businessman ? or a Wannabe ?

• To have a successful business, you need a certain set of characteristics. You must be willing to take calculated risks, be optimistic, and enthusiasm

• You must be prepared to play many roles i.e. Being a chairman of the company but still willing to fix the toilet when its broke.

2. Which business is suitable for me ?

• There are lots of ways to find a business idea. You can read about it on Newspaper, Magazines, Internet surfing or Forums. But for most people, they begin with their interest first.

• Back in 1989, when I found out that I was really interested in computer servicing while working as a Salesman, I left the company and started a business that provides Computer Servicing for companies that need to outsource their personal computers or monitors for repair.

3. Is the business still viable in the market ?

• Find out if the business is still viable by talking to potential customers, suppiers and distributors. You can even attend Trade-show or Seminar to guage if the cake is still hot. You are merely exploring the opportunity.

• If you have a product at hand, make some tiny sales in fair or local outlets to get feedback, good or bad, so that you can fine tune your business concept or other matters.

4. Write a business plan.

No business can proceed without a game plan !. It should describe why and how you want the business to be carried out and by when will it be consider successful.

• It address concern such as : What kind of product or service am I providing? Who is my potential customers ? How can I make money out of it ?

• A plan can be fine tune as many times along the way so that it keeps the company growing in the projected direction.

5. How much do I need to start a business ?

• Most entrepreneurs start their business with the savings they have, or they also loan some funds from their family and friends.

• You also can get a loan with a bank provided you have assets e.g. your home and a very sound business proposal plan.

• The best advice is always to start small, and slowing building it up along the way.

6. What choice of business do I have ?

• For detailed business choices, you might want to read my September 24th post.

• The most basic choices are Sole-proprietor, Partnership and Private Limited. Each offers different legal protections, tax savings and ownership requirements.

Wednesday, September 24, 2008

Which business is for me ?

There is basically a few types of businesses a person can choose to embark on. It very much dependent on his financial standing, skills and business knowledge and much more.

Common Types of Business

Sole proprietors / traders

Most people who start in business do so as sole proprietor or traders, working on their own, often from home. They alone receive the income and are therefore liable for any losses or debts. Having no colleagues can be liberating, but might equally be isolating with no one to provide motivation or inspiration.

E.g : home-based online traders, ABC Computer Services


You could set up in business with one or more colleague(s), relative(s), or friend(s). This form of business relationship is usually known as a ‘partnership’. Each partner might be equal or some may have a larger share of the business. Your income and liability are proportionate to your share in the business.

E.g : ABC Computer Services ( does not reflect a Pte Ltd at end of name.)

Limited companies

As a limited company, the business is registered with ACRA ( Accounting and Corporate Regulatory Authority ). There are more regulations associated with running a business this way but these are generally offset by tax advantages. Those directing the company have shares proportional to their involvement.

E.g. XYZ Freight Forwarding Private (Pte) Limited


Two type of people here :


They expand by getting other people to buy into their established business which provides equipment, raw materials, training and a well-known commercial name, thus allowing the franchisee branch make an individual profit. An obvious advantage is that it presents a ’best of both worlds’ scenario. On the other hand, initial outlay can be high and income is not guaranteed.


People who are wants a faster way into a proven business system. Their initial investment can be very high although it comes with training and support including setting up of branch. The franchisor makes a monthly Royalty income from the business generated.

E.g. of franchise business : MacDonald restaurant

Buying a business

Also commonly known as Merger & Acquisition.

Taking over an existing business is still better than starting up on your own, but make sure you do your research! It will be much easier to invest in an established firm with a solid customer base and a motivated workforce, rather than one with liabilities or a poor reputation. You can find a business to buy through local press, estate agents, trade associations and websites dedicated to this sort of provision.

Social enterprise

This is an expanding area and has evolved from a desire to help the disadvantaged, providing much needed resources or services in disadvantaged areas and offering employment to those who would otherwise be unwaged.

E.g : for the Disabled.


Charity Portal, ,provides you with all answer regarding charities matter in Singapore. Certain trading activities are barred to organizations with charitable status.


Quite similar to Sole Proprietor or Sole Trader.

Freelancers offer a skill or service to other businesses which employ them as needed for particular projects or for set lengths of time. They may be given office space or work from home, delivering work to (often tight) deadlines. Some freelancers will actively market themselves. Others may obtain work through agencies or by a direct approach from employers.

E.g. : Computer Support or Monthly Nannies

It is therefore not an easy choice for anyone to start a business; however, with proper considerations and decision making, anybody can start to do something that can literally change their life in the near future.