Singapore ranks highest among the easiest places to set up business in the world. Also, the country has a well developed infrastructure, a friendly tax regime, strong legal protection for intellectual properties, and great government support for entrepreneurship, all of which promote business. Entrepreneurs make mistakes, and there are even more possibilities of making mistakes in a foreign country. Some mistakes can be costly or have heavy implications, like huge financial losses, reduced market share, diluted customer loyalty in the brand/business, and at worst, closure of the business.
Despite the influx of foreign entrepreneurs into Singapore due to all the benefits and opportunities it offers, there are some mistakes that they may make. Below are some mistakes to avoid:
Little or no market knowledge
It has been observed that 80% of those who start a business fail in the first 18 months. The reason for failure is the lack of proper knowledge of the market and what the customer needs. Entrepreneurs need to test the market and estimate the demand for their intended offering. To minimize costs and time wastage, businesses should define their products’ unique selling points. Some ways through which foreign entrepreneurs can acquire market knowledge in Singapore include conducting market research, relying on in-country market reports, and networking with some possible clients and partners in the country.
Potential entrepreneurs intending to venture to Singapore should consider doing a pre-visit to understand the Singaporean market and environment. For easy processing of their EntrePass into the country, they should work with a reliable visa and immigration agent like One Visa.
Failure to monitor costs
Although it claims the top position as the best place to do business globally, Singapore is also among the most costly places to live. Rent and labor costs can be very high, making running a business a daunting task. If an entrepreneur fails to monitor costs or budget properly when starting, they may face hardships later. It is advisable to be careful when budgeting and planning, and even to overestimate the prices to absorb any shocks.
Working with the wrong partners or distributors
Foreign partners may consider working with local partners or distributors after evaluating several things. It may be a beneficial move in terms of getting a good entry into the market, acquiring referrals, and obtaining ideas. However, it would be necessary to vet the partners, be it by checking them out with Accounting and Corporate Regulatory Authority (ACRA), or by conducting a search on their tax compliance, creditworthiness, and reputation. Otherwise, foreign entrepreneurs may suffer losses or get into legal issues due to crooked partnerships.
Limited understanding of the tax regime
It may be hard at first for a foreign entrepreneur to have an in-depth grasp of the Singapore tax system, thus they may not take advantage of the various tax incentives. For example, new ventures that meet certain requirements may get tax relief on the first $100,000 of normal taxable income for the first three successive years of being assessed. To have a good understanding of the tax regime and government support, the entrepreneur should do proper research and engage professionals.
Employing the wrong people
Attracting the right talent, especially those who are excellent performers or who have high potential, is a tall order for most Singaporean employers, so foreign entrepreneurs may face the same obstacle. Talent retention is also a big challenge, so start-ups may have a problem getting and retaining top talent with the right skills and mindset for working in business in the country. Having a core team from the parent company or head office to train and guide the Singaporean staff or those working in the business may be a good idea. They will help to align the staff with the business vision, mission, and core values. It will help save your company tons of resources—including time and money—involved in recruitment.