Hello brothers
I got this article hor when i was looking through the ACE Forum
http://www.ace.sg/info/firstSteps.aspStarting your own business is an exciting endeavour which can be highly satisfying in many respects. However, you have to be prepared and well acquainted with basics of business. There are many rich sources of information on starting up, however there are some basic, steps, which any entrepreneur will usually undergo to make his business concept a reality.
This section provides some tips for the budding entrepreneur and although it is by no means a prescription for success, it will hopefully give you a good start.
1. Self-assessment - Are you ready?
Starting a business is a challenge and will have great impact on yourself and your family. It involves a certain amount of risk and a great deal of commitment in terms of time and effort. Before you start, ask yourself these questions and assess if you are ready:
Personal Evaluation
Do I have a business idea?
Am I an initiator or do I prefer to be given instructions on a task?
Do I enjoy solving problems?
Do I thrive on challenges?
Am I an effective communicator who can build networks?
Do I have the skills to manage a business?
What are my options if the business fails?
Business Evaluation
Do I have a business idea?
Have I tested my business idea in the market?
What is the unique value proposition of my product or service?
What is the market potential for the service or product?
How many competitors are there in the proposed business?
Do I have the capital to start-up? If no, can I get access to sources of funds?
What are the financial risks involved?
What kinds of resources do I need to run the business and can I afford them?
2. Developing a Business Plan
A good business plan is your company's resume to attract capital, talent and business partners. It is a description of your proposed or existing business and should include information on the business' products or services, markets, marketing strategies, manufacturing procedures, ownership, management structure, needs (organizational, personnel and financial) and projections. A well-prepared business plan serves two important functions. Firstly, it is a basic management tool that helps guide the future direction of your company. Secondly, it is a mandatory document if you plan to seek business financing.
The elements of a business plan include:
Your proposed business concept and value proposition
A description of your products or services with emphasis on their distinguishing features, the market needs they will meet, the market potential and assessment of the competition
How the products will be made, or services performed
An outline of your management team's experience and talent
A summary of your financial projections; and
How much money you are seeking, in what form, for what purpose and how it will be repaid.
3. Financing your business
To begin your business, you will need to raise start-up capital. You can either fund your business through your savings; borrow from friends and relatives, or via bank loans or private equity investors. Once your business is set-up, it is also important to understand how to manage your financial resources effectively. The two main sources of outside financing are via loans from the banks or private equity investors (including business angels and venture capitalists). How are they different and what do they look for?
Bank loans
In the case of a new start-up with no track record, the bank will usually assess your personal credit history, whether you have paid your credit card bills, mortgages, etc. on time. Secondly, banks usually lend only if they deemed that you have the ability to pay back. Here is where the business plan is useful to demonstrate the potential revenue streams. To reduce risk, the bank will usually require you to pledge your assets as security for the debt. The advantage of a bank loan is that you retain 100% ownership of your company and can choose to run it the way you deem fit.
Private Equity Investors
A private equity investor looks at your business plan, experience and team, and decides whether you have a good chance of success. Criteria could include probability of quick returns, growth potential, scalability of business model and capability of management team, amongst others. In return for giving you money, he gets a piece of the ownership in your company. If you fail, you don't pay him back. But if you become a smashing success, he gets a portion of every dollar you make. This is a situation of high risk, high reward.
Start-up Assistance Programme
(i) Startup Enterprise Development Scheme (SEEDS)
Startups can apply for SEEDS equity financing when they are in their early stages. The scheme is administered by the Economic Development Board (EDB). Every dollar raised by a startup from third-party investors will be matched by EDB up to a maximum of S$300,000. Third party investors must put in a minimum of S$75,000 each. Both EDB and the third party investors will take equity stakes in the company in proportion to their investments.
(ii) SPRING SEEDS
Non-technology start-ups can apply for SPRING SEEDS equity financing when they are in their early stages. Every dollar raised by a start-up from third-party investors will be matched by SPRING Singapore up to a maximum of S$300,000. Third-party investors must put in a minimum of S$50,000 cumulative. Both SPRING Singapore and the third party investors will take equity stakes in the company in proportion to their investments.
(iii) Enterprise Investment Incentive (EII) Scheme
The EII Scheme is a tax incentive scheme that allows investors in innovative start-ups to deduct their investment loss amount against their taxable income. With EII status, a start-up can issue certificates to its investors for investment of up to S$3 million. Investors with these certificates can deduct any investment loss from their taxable income.
For technology start-ups, application for EII status can be made through the Economic Development Board.
For non-technology start-ups, application for EII status can be made through SPRING Singapore.
(iv) Growth Financing Programme
This programme is designed to support early stage, Singapore-based companies that have the potential to become global competitive enterprises. Companies that have successfully completed their product development with early customer traction can apply for equity financing for earnest overseas market expansion activities through the Growth Financing Programme. Potentially, every S$2 raised by the growth company from third-party investors will be matched by S$1 from EDB, subject to a maximum of S$1,000,000 under both the SEEDS and Growth Financing Programme. Minimum investment from third-party investors is S$500,000. Both EDB and the third-party investors will take equity stakes in the company in proportion to their investments.
(v) SME Loan Securitisation Programme
A SME Loan Securitisation programme will be ready by 1st quarter 05. The Programme will enable SMEs especially the under-served SMEs such as start-ups without established track records and those that lack collateral, to tap on the capital market to obtain financing for their businesses. DBS is the appointed programme manager.
(vi) Maritime Start-up Seed Fund
The Maritime Start-up Seed Fund provides assistance in a form of equity financing to start-ups by matching dollar-for-dollar up to a maximum of S$300,000 equity financing raised by the start-up from third party investors. The Maritime and Port Authority of Singapore (MPA) will take up equity stakes in proportion of its investments.
(vii) Locally-based Enterprise Advancement Programme
This programme supports organisations such as industry groups, business and trade associations, and incubators that provide vital services to enterprises and thus help to accelerate their growth. The activities of these organisations, generally referred to as multipliers, will spur the creation of new enterprises and industries. Multipliers that can make significant contributions to Singapore's efforts to develop start-ups and new industries are named LEAP partners and can tap on a capability development grant managed by EDB for new initiatives.
Some of these LEAP partners are:
Singapore Food Manufacturers’ Association
Founded in 1967 with the purpose of developing and promoting the local food manufacturing industry. It aims to help local food manufactures in areas of capability development, product development and identifying new niches in the food industry so as to upgrade our local food manufacturers. SFMA currently has about 240 members.
Regional Enterprise Centre (REC)
A new arm of the Association of Small and Medium Enterprises (ASME) which aims to provide a platform for regional SMEs to collaborate and partner with local SMEs. ASME was founded in 1986 by a group of entrepreneurs to bring together entrepreneurs of various industries and service sectors to exchange their knowledge, experience and aspirations. REC will support regional SMEs intending to invest in Singapore to set up a Singapore presence, as well as facilitate collaboration with local SMEs and the expansion into the international market.
Entrepreneur Resource Centre (ERC)
Established to provide entrepreneurs with business support and professional assistance. The centre aims build up the private education industry in Singapore by providing the infrastructure and resources required to help reliable but small and fragmented educational institutes to grow into sustainable enterprises. These institutes have been identified to be in areas of business, finance, hospitality, culinary and services.
IdEAHUB
A new initiative to be set up by the Innovators and Entrepreneurs Association (IdEA) to facilitate the growth of entrepreneur start-ups. IdEA was set up as the leading body to represent and promote innovators and entrepreneurs in Singapore. IdEAHUB aims to support petty innovators and start-up companies in areas of IP evaluation, prototype processes, marketing strategies and distribution channels. The mentoring programs and business networks will aid in developing budding innovators, entrepreneurs and their businesses.
Lubaan International Pte Ltd
A design company based in Singapore, focusing on home furniture and furnishing accessories, with access to the international market and OEM manufacturers around Asia. Lubaan aims to identify and groom potential local designers, help to prototype and market their products to the international market, thereby seeding and accelerating the growth of the design industry in Singapore.
Click here for more information on LEAP and other LEAP partners.
4. Registering the business
Following the conceptual stage of starting a business, if the going is still right, you will move towards the actual legal formation of the business. You would need to understand the types of legal business format, licences and business law of the country that you are going to register your business. You can now register a business or incorporate a company as well as apply for the required licences for your business at the Online Business Licensing Service.
5. Business Resources
(i) Entrepreneurs' Guide
This guide is intended to help walk budding entrepreneurs through the process of starting and operating a business. It includes advice and tips on topics such as assessing the business environment, writing a business plan and financial management. It also provides a good overview on employment, taxation and licensing matters. A draft version is currently available at
www.business.gov.sg. If you have any feedback or comments as to how the guide can be further improved, please send them to
btfeedback@mti.gov.sg.
(ii) Enterprise at NUS: A Handbook
This handbook consolidates all the information a University entrepreneur will need to get a business started at NUS. The services and facilities offered at NUS Enterprise are clearly outlined, and the procedures for setting up a University company are explained in an easy-to-follow step-by-step guide. The handbook also includes a chapter on how to write a good business plan. In addition, it also covers the practical aspects of starting a business in Singapore, such as how to register a business or a company, tax and employment laws and how to seek government or private venture funding. This handbook is available at NUS Enterprise website.
Useful websites for business start-ups include:
Accounting and Corporate Regulatory Authority Singapore
eCitizen
Inland Revenue Authority of Singapore
Intellectual Property Office of Singapore
LawNet
Singapore-business.com
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