Is your business struggling to make a profit? Seeing this news today totally reminded me of my business journeys: “‘Just stay in your job, collect your salary’: Cafe owner warns others against starting an F&B business”
It is true that the business world is brutal and often lonely, with 7 out of 10 businesses closing within 10 years.did not mention failure, since closure can occur for a variety of reasons, including pivoting, better employment prospects, etc. However, I do not entirely agree with the statement that you should only start a business if you have deep pockets.
Taking myself as an example, I’ve started three businesses since 2012 for less than $5,000 SGD each. I failed 1 business because technology wasn’t ready and my knowledge wasn’t sufficient. I closed my other profitable businesses because I got better job opportunities and learned from successful business owners. As a result of what I learned, I ended up starting this digital service agency.
Aside from not all 9-5 jobs being well paid, people often work overtime or even on weekends or public holidays. You’ll see what I mean by looking at how many lights are left on in the Central Business District (CBD) of Singapore on a Sunday night.
Nevertheless, there is no doubt that starting a small business is a daunting process. You need a dedicated and careful approach, hard work, and diligence. Many startups fail for a variety of reasons, including the lack of idea validation, a lack of adequate financial planning, failing to adapt to Singapore’s business environment, and a lack of startup skills.
In this blog post, we will discuss these reasons in more detail and provide tips on how to prevent your small business from failing. With the right knowledge and strategies, you can reduce your risk and help you build a successful business.
1. Idea validation
Your business will eventually close if there is no demand for your products or services. Idea validation is the most important step before starting your own business. As well as pushing yourself physically, it will also test your mental strength, which you’ll need to develop over time.
Interact with others
A business is all about sales. Talking to people about what you want to sell will help you build a first group of potential customers. Gathering feedback helps identify the gap and build a better solution to solve the customer’s pain point.
Conduct a survey
You should conduct a survey with as many people as possible if you are targeting a broader B2C audience. Your product can be validated in this manner if there is sufficient demand.
Participate in online communities
A large number of individuals join communities in search of solutions in the same category. This is an ideal place to listen, to socialize, and to participate. However, you should avoid spamming your products or services, as this may negatively impact your brand.
Do your research
In my experience, I have met a lot of leads who have ambitious features for their websites or applications and get taken aback when they see the quotation. My advice is to start small and build upon it as your business grows. Not all businesses require a website, so consider it when you have the necessary resources to manage and update it regularly.
A marketplace such as Shopee or Lazada would be a good place to start selling physical products. In the case of selling services, consider Tik Tok, Facebook, Linkedin, Instagram, and Youtube first. They are all free platforms that offer a variety of features.
2. Accounting and financial management
Spend your money wisely and plan your finances accordingly. Depending on your business model and risk management, a well-managed business may not begin to show profits for at least a year.
Starting a business is not without costs, particularly if you start with nothing. You will need to pay for marketing, equipment, and software to run your business.
For small business owners to avoid overspending, it is essential to delegate responsibilities effectively and research products thoroughly before making any purchases. A realistic set of goals and objectives should also be set and updated frequently so that the business does not lose sight of why it was founded in the first place. Lastly, business owners should communicate their goals clearly to ensure everyone understands what needs to be done in order for the company to be successful.
3. Adapting to the business environment in Singapore
Small businesses typically fail because they lack a solid foundation in terms of marketing and sales. In order to establish yourself in this highly competitive market, you need to identify your target market and create compelling content that resonates with them. It is also important to understand the retail landscape of Singapore, from the unique shopping districts to the changing trends in consumer behavior.
Grow your business by utilizing technology tools, including social media and online marketing campaigns. These things are also worth considering:
Don't let copycats get you down
Don’t be surprised if your business idea or product is replicated shortly after launch. Continuing to innovate your products is key to staying focused and passionate about your business and not being set back by copycats. In many cases, copycats are often left behind and gradually shut down as time goes on.
Increasing labor costs
Finding and keeping talented employees in Singapore is probably the most difficult task. It’s mainly due to the fact that many big companies offer attractive salaries and benefits to their employees that startups can’t compete with. In my experience, there are employees or collaborators who are willing to stay if you deliver what they expect of you. Workplace culture, responsibilities given, communication, and appreciation are some of the factors.
Be realistic when it comes to employee turnover. Many clients I have worked with have been disappointed when an employee resigns, as all the efforts and investment in recruitment and training have to be repeated. The pursuit of a brighter future is not a matter of right or wrong, it is simply a matter of survival.
Taking your business to the next level
In Singapore, smaller companies have a few advantages over their bigger counterparts. A notable example of this is that you are much more agile in your decision-making process and in implementing new changes. In contrast, large companies require multiple meetings and approvals before they can implement a change.
Hence, don’t be afraid to leverage technology tools such as CRM systems to streamline operations and improve customer experiences further.
There are many factors that make Singapore an excellent country to start a business, including its security, average purchasing power, and a non-corrupt government. A large number of financial grants and support are also available from the government for the digital transformation of business entities.
4. The lack of essential startup skills
Singapore’s small businesses are a cornerstone of the economy, however, they are also one of the most common sources of failure. Why? To put it simply, many founders lack the essential startup skills necessary to succeed.
Setting goals and planning
One of the most common causes of small business failure is a lack of planning and goal setting. In the absence of a clear vision and roadmap, small businesses are prone to making irrational decisions without considering their long-term consequences. A result of this could be a waste of resources, poor customer service, and poor quality products.
Small business owners often struggle with financial management due to two factors: inadequate knowledge and experience in finance, and a lack of understanding of how expenses relate to income. The result can be disastrous situations where your cash flow is tight, and you are unable to invest in growth or marketing.
Another common problem among small business owners is poor execution. Due to this, tasks are not completed on time or even at all according to plan, leading to frustration for both customers and business owners – customers who expect better service and owners who spend more time fixing things than actually doing them. Furthermore, poor execution can result in directorship problems where members of the team have conflicting goals or no clear idea of their responsibilities.
Customer management is a major challenge for small businesses. Many small businesses place a greater emphasis on selling products than providing excellent service to their customers. No matter how good the product is, unhappy customers will not be satisfied with their experience. Additionally, unsatisfied customers are more likely to tell others about their negative experiences, which may further damage your reputation. There’s a saying “好事不出门，坏事传千里” , in plain English, good things don’t spread, but bad things do.
Other factors contribute to small business failure, including a lack of knowledge about branding and marketing strategies, but these four startup skills will always be essential if you want your company to succeed.
All in all
Taking the plunge and starting your own business in Singapore can be incredibly rewarding; however, it can also be difficult and challenging. Understanding the unique challenges small businesses face in Singapore, such as high real estate prices and limited access to capital, will make it easier for you to overcome these obstacles and succeed. By avoiding common mistakes such as poor financial management and failing to plan for future growth, you will ensure long-term success for your business. You need to have a clear strategy and objectives in place for your small business in Singapore, as well as an understanding of the local market. Last but not least, investing in the right technology tools or marketing strategies may help you gain an edge over your competitors.
Always keep in mind that everyone has 24 hours a day, so never think you can do everything on your own. When you have the opportunity, collaborate with other business owners, learn from people around you, and strive for a win-win partnership where both of you can benefit.
As a business owner, you should strive to continually learn new things to help your business grow. I hope this article helped you see the world of business from a different perspective. All the best with your new venture and best wishes for a happy and healthy new year.