6 Reasons Behind the Failure of Singapore Start-ups
Singapore has earned a great reputation for its reforms and consistent economic growth. Over the last two decades, this island country has established a milestone by becoming the financial hub of southeast Asia. It is no wonder that a number of its citizens and foreigners opt to open a company in Singapore.
These individuals aim to prosper by implementing their creative ideas to add value to the existing products and services. Some of them have game-changing, innovative ideas to implement. Several Singapore incorporation services offer their expert services to these individuals. They simplify the task of registering a Singapore company setup.
What is Ailing Singapore Start-ups?
Singapore supports enterprising souls with a well-established start-up ecosystem. It helps them with the grants and affordable loans. It also offers them low tax rates and tax rebates, incentives, and exemptions. Still, some the start-ups falter in their steps and fail.
Surviving initial period of 3 years proves hard for many the start-up businesses. The statistics show that as many as 30% of the Singapore start-ups goes down within this period. Following is a brief discussion that may benefit you if it is your intention to incorporate a company in Singapore.
1 Lack of Effective Management System
One of the major reasons behind the fall of newbie Singapore company setups is they neglect to install a proper management system. It can happen with anyone, however, the most prime victims are the greenhorns, new entrepreneurs. Somehow, they fail to understand that being a business owner has a lot to do with the effective management of available resources.
It is understandable that selling their services and/or products to generate revenue is the main priority for the business owners. However, keeping track of business’s financial transactions and recording them during the process of bookkeeping is also important. Accounting of the books of a business reveals how the cash is coming in and flowing out of it. It also shows where the business owner should cut expenses or divert it for a better cause.
The business owners, in addition to the management of the financial aspect of the business also have to provide efficient staff management. The hiring of qualified and experienced professionals is an inherent part of every successful business.
2 Lack of Experience
Yes, start-up businesses often suffer from the lack of experience in their owner. It happens when the owner has a lot more zeal than experience and impatient to start a business. It hampers the decision-making process in the organization and it shows in the way they approach and deals with the situations and problems.
Consequently, the business suffers and all the efforts come down to NIL. The business owner needs to hire experienced professionals to discharge the domain-specific responsibilities of the business.
3 Lack of Effective Business Plan
It is highly important for a business owner to have an effective business plan in place before committing to the incorporation of a company in Singapore. The individual, though inexperienced, could work hard during the market research and survey phase. It helps them in identifying the market niche, opportunities, and the customer’s needs.
The business plan should also cover the other aspects of running a business like estimated income, salaries, property rental, product development, production costs, etc. Alternatively, they can also take advice from their Singapore incorporation services which also assists in coming up with an effective business plan.
4 Lack of Financial Resources
Many of the start-ups begin with the small to meager finance. This affects the execution of their business plan. Activities like marketing of their products and/or services get affected. It limits their reach to their prospective customers, which in turn, affects the revenue generation and their survival becomes questionable.
The lack of funds primarily limits the marketability of the start-up itself. It cannot even offer salaries at par with the prevailing market rates and fails to attract and recruit qualified and experienced professionals. It puts the implementation of the business model in jeopardy. The financial difficulty may also arise because of the lack of proper controls in the absence of a qualified accountant or an accounting service.
5 Faulty Business model or Products
A large number of start-up business fails for the lack of a proper business model. Some of the business owners shy away from doing the necessary market research and surveys. They forget that they need to put in hard work to find what their prospective customers want. Their inability to zero-in on the salable products is one of the cause behind the failure of their young business.
6 Failure to Adapt to the Market Conditions
Each marketplace is a volatile place. The needs and the demands of the consumers keep on changing. The advances in technologies also have an effect on what the customers want. The businesses, both, start-ups and established, need to adapt to the changing conditions. Those who fail to do so are brought down to their knees as it happened to the global giants such as Nokia and Kodak.
By opting for a Singapore company formation, a business owner gets to enjoy lower tax rates, excellent infrastructure, and a toehold in the most happening place in Asia. However, it also means choosing the right business model and being ready with the most appropriate business plan. It also entails finding an investor and convincing him to invest money in your business, whenever the need arises.