The Challenges of Starting a Business in Singapore
The Lion City, Singapore, has now emerged to be the most business-friendly economy in the whole world. According to the World Bank’s ranking of the easiest places to do business in, despite its tough competitors like New Zealand, South Korea, Hong Kong, and Denmark, Singapore has held onto its top spot for ten years in a row. Even the Singapore Economic Board boasts highly as Asia’s Financial Hub remains to be the easiest place in the whole world to do business. No wonder, all kinds of rookie and veteran business people from all over the world flock here with hopes of growing their company and making more money.
Now if you wish to take advantage of all the benefits of opening a business in Singapore such as: superior geographic location, easy access to funding, low taxes, government grants, and a whole lot more, it should also go without saying that you must be ready to take on all the stumbling blocks that would come your way. Doing business either locally or internationally is not without any kind of challenge. As with almost everything good in this world, it comes with a good price as well. Hence, without further ado, we are here to give you the top challenges you’ll face if you’re planning on opening a business in Singapore:
East meets West
As you all know very well, one of Singapore’s strengths is having such a diverse population. However, it could be a challenge as well; especially for the newbies. It is very risky to assume that when you go to Singapore, all you’ll ever meet and mingle with are just Singaporeans. Most of the population are predominantly Chinese, Indian, and Malay. And also because of the country’s open immigration policy, you’ll sure meet Americans, Europeans, and many other races along the way. In the same way, the people draws influence from both Eastern and Western practices because of their rich history. So you could just imagine all the differences in culture there. Thus, to successfully do business in SG, it is absolutely key that you appreciate and understand ALL the many different customs and traditions that could impact the Singaporean business culture and etiquette.
Good Relationship as Foundation
Because the Singaporean way of doing business is heavily influenced by Asian traditions and philosophies, they simply emphasize the importance of building good relationships even before you actually do business with them. Never think that relationship-building would come naturally as you do your business. As a matter of fact, this is one of the keys to close a business deal with any Singaporean. They prefer not to rush on things and carefully build rapport first before they make their decision in doing business with you. So as an added tip, the key here is to demonstrate good character and prove your pure and honest intentions to the people you’re about to deal with. In that way, you’ll easily build rapport, connect, and create a good business relationship.
While it is true that Singapore is noted for having the World’s Best Professional Workforce, you might experience manpower shortage; especially if you’re planning on opening an SME. According to recent surveys and research, most locals do not apply for low-paying service roles. And even if you’re planning on battling that by bringing in some manpower from your country, you might still experience some problems because of the strict employment limits on foreign workers.
Hefty Overhead Costs
Almost, if not all, are aware that the costs of living in Singapore is relatively higher than other Southeast Asian countries. That also include the expenses of opening and running a business. As you plan for the business you’re about to open in Singapore, be prepared with more capital and funds for your first months of operation as it’s going to be really tight. Workers expect higher salaries. Rental costs for offices and establishments are high. Advertising and promotion services aren’t cheap. And those aren’t the only ones that’ll make you break the bank.
Growing Number of Empowered Customers
Being a highly modernized, sophisticated, and prosperous country also has its fair share of consequences (in a business sense, that is). The consumers in Singapore are very knowledgeable and confident now more than ever. In today’s world where there’s easier access to more information, consumers have grown to be more meticulous and sure of what they want. Unlike before, your customers need very little education on your product or service. That instead of the introduction stage, more effort is needed on convincing. Moreover, add that to the very high competition in Singapore. As the government is very open and inviting for foreign businesses, consumers have the luxury to bargain for the best prices as they have lots of suppliers to choose from.
Doing Business the SG Way
If it’s going to be your first time to business in another country, we strongly recommend that you take the Singaporean business culture more seriously. Not to take you aback though, but simply because it is a very good training ground. As you learn to absorb and get used to Singaporean business etiquette and practices that is a mix of both Eastern and Western cultures, it’ll eventually be a piece of cake for you to deal with other foreign customs afterwards. So make sure that you respect, research, familiarize, and accustom yourself to all the Singaporean customs when it comes to doing handshakes, giving out your business cards, setting an appointment, doing a lunch or high tea meeting, and more.
Just like what we have said, there are lots of opportunities that await you when you do decide to put up a business in Singapore. And albeit the cross-cultural differences, high costs, lack of labor force, and strong competition, nothing still compares to how easy and beneficial it is for you to open and do business in this successful city state in Southeast Asia. These challenges aren’t here to scare nor stop you from achieving your business goals. But rather, to make you better prepared for everything.
So to pump you up more, remember that Singapore has a great track record of business success stories and impressive network of founders. In addition, there are lots of experts and mentors in Singapore who are willing to work alongside startups. Simply put, what we’re really trying to say is, despite all those challenges, there is nothing for you to be afraid of. Instead, you must be excited and looking forward to it. Because apart from the opportunity to grow your business, you are also about to learn from the best.
You haven’t heard the best part yet! Aside from all those, there are reliable accounting experts and financial gurus who are more than willing to help you set up everything for your new business in Singapore – and that’s our team here at Enterprise Assurance PAC. Investing and opening a company in Singapore is never a hassle with us around. To know more, speak with us now by simply dialing +65 6438 4958. Alternatively, you can click the button below to send an enquiry.