Most businesses fail within two years of launch. Over the years, we’ve seen hundreds of new owners constantly make the same entrepreneur mistakes. Even Singapore, with its low-tax policies, business permissions and state-of-the-art infrastructure, has 30% of new ventures fail within the first three years of existence.
The reason? Starting a businesses is a high-risk, high-reward investment. Success is never guaranteed and entrepreneurs must be prepared to pay the price for mistakes, errors in judgement and miscalculated risks. Even seasoned entrepreneurs are prone to mistakes that can lead to pitfalls and eventual closure.
If you’re a business owner starting a company in Singapore, here are some common entrepreneur mistakes to steer clear of:
1. Choosing The Wrong Partner
Having a business partner is convenient and helpful when it comes to starting a new company. A business partner plays a vital role in helping to cope with the responsibilities of starting a new company and planning important decisions. However, it must also be kept in mind that choosing the wrong partner is a common mistake made by new entrepreneurs, which adversely impacts the business over time.
– Choose your business partner carefully, even if the person is a friend or family member.
– Disagreements and fights are bound to happen, but the right business partner will always have your back.
2. Incorporating The Business On Your Own
Incorporating a new business in Singapore is simple. It takes about 20 minutes and can be done remotely. The simplicity of the process means entrepreneurs often try to incorporate businesses on their own without consulting a proper advisor, resulting in rejection, non-compliance and many other issues.
– For new businesses, we recommend hiring an incorporation agency.
– The agency can guide you and help you better understand Singapore’s business structure, tax rules and compliance requirements.
If you’re interested in learning more about incorporation agencies, you can read more about them here.
3. Ignoring Finances
Another mistake new entrepreneurs make is ignoring their company’s finances. Starting a business is expensive, and ignoring financial red flags means most businesses end up struggling to stay afloat. For your business and finances to complement each other, it is important to periodically check your financial statements in terms of how it is helping your business.
– Keeping an eye on your finances will also help you determine necessary financial decisions, figure out areas to invest and cut down unnecessary expenses.
– We recommend hiring the services of a fund administrator to help you with fundraising, portfolio management, and other financial activities when you’re starting out.
To learn more about fund administration services, click here.
4. Choosing The Wrong Investors
Similar to choosing the right business partner, picking an investor who is good for your business is paramount to your company’s success. Investors are among the most important parts of any company as they bring in business capital. While good investors contribute to rapid growth and expansion, the wrong investors can set your business back by months or even years.
5. Hiring Too Quickly
Hiring employees too quickly is one of the most frequent mistakes new entrepreneurs commit. As important as it is to hire new recruits, it is essential to hire candidates that not only fit the business requirements but who also have the skills and experience needed to fulfil the job scope and responsibilities.
– Take time to hire the your staff with a thorough recruitment process.
– If you are unsure or don’t have time, hire a recruitment agency to do the work for you.
6. Learn From Your Mistakes
In addition to these points, other mistakes like ignoring company branding, missing employee accountability and avoiding customer feedback can adversely affect your new venture too.
Starting a business is a relatively simple process in Singapore, but successfully running a company is a different story altogether. Supplement your business acumen with judicious business strategies and decisions.
Hot Tip: Accept that mistakes are bound to happen. The goal is to minimize mistakes by consulting experienced advisors and seeking assistance from them when things go south.
For more information on setting up a business in Singapore, click here.