Challenges that young entrepreneurs face in Singapore

November 1, 2013 | By

Challenges that young entrepreneurs face in Singapore

There is a Chinese saying: “万事起头难”, which means that in everything and whatever you do, it is always the hardest from the beginning. Needless to say, the same goes for everyone, business owners or anyone starting a business.

For young entrepreneurs, the challenges they face might somewhat be more daunting than any entrepreneurs. You have a great idea, a unique product or service idea that could meet the needs of the market, so what’s next?

In The Beginning

One of the challenges young entrepreneurs face is how to develop that idea into a plan, a vision. Who are your customers and how do your products or services add value to the market place? How do you actually identify a problem and turning it into an opportunity, and turning your solutions into a business plan?

Raising Capital:

Once this business plan is written, the next challenge is to find the capital to fund your startup. If you are bootstrapping, how much do you actually need and how long can you last? What are the expenses needed and with high rentals in Singapore, you will also have to factor in getting a good and sufficient location for your office or working space.

Insufficient experience:

With no credit history and no relevant experience, any entrepreneurs, whether young or old will find it hard to find the capital or investors who trust you enough to finance your businesses. You might face numerous rejections and might find it hard for older people to take you seriously. With no prior experience and business network or connections, you will also feel lost as to how and where to get help, how to rent an office, where to get suppliers or factory to produce your products, whom do you go to if you need certain information on how to incorporate a company, what are the documents you need or what are the procedures to be followed, the legal requirements, licenses required and different taxes you have to pay, etc. It is also advisable to separate your personal finances from business finances as it will be easier when you file for tax and can keep track of your personal or business expenses. Getting expert help from an experienced accountant and business consultant will help you in understanding the differences and keep track of financial health of your business.

Process

Lack of Knowledge: Once the obstacles to incorporation have been overcome, a new set of challenges set in. Yes, you have your products or services all ready to be sold but how do you go about getting customers to be aware of them? Do you have knowledge about the industry you are moving into and how the market move? How do you convince customers to buy your good or use your services? How do you educate the market about your products or services? How to go about getting the first deal signed? How or where do you find references about your previous works and testimonials? With no credentials and experiences, it will be inevitably be one big obstacle that you will have to overcome.

You have to read a lot, especially those articles affecting businesses and markets, e.g. Business Times, arming yourself with knowledge so you can impress your clients and gain trust. It will also help in keeping up to date with the latest changes and trends in business. All this takes time and effort, so you will have to be very patient to build relationships with your clients or suppliers to gain trust from them.

Sacrifice:

In the process of building your business, many sacrifices will definitely be inevitable. Other than facing numerous rejections, you might have to forego your time, social life and even sleep. While your friends are out enjoying dinner or partying away, you could possibly be working late to fulfill orders for your customers or racking your brains to solve a problem that has came up. This is also a test of your self-discipline and perseverance.

Stress: If you have been working for others for some time, you will experience stress in this transition of changing from being an employee to an employer. On top of that, you have to learn to make decisions on your own and to make it fast! Even if you have a partner, it is also a challenge as it is not easy to find a working partner whom you can truly trust. If you have a team of workers, you will have to learn to lead and manage them as well.

Other than your own workers, you will also have to consider your competitors. Who are they? What are their strengths and weakness? What is your competitive edge over them? How fast are you in finding ways to innovate and beating them from taking over your market share? What if money is not coming in and one month you are struggling to make ends meet and the other you are spending on your machineries and products?

What would your parents or friends say or think of you if you are not as successful as they expect you to be?

Trivial tasks seem difficult:

As a young business owner, be prepared to wear different hats. You can be a cleaner one day, another day a salesman and to being a director another day, it’s a one man show. If you cannot bear starting from the bottom, then you should really consider carefully do you have what it takes to be an entrepreneur.

Unforeseen Challenges & Costs:

As detailed and concise your business plan is, one could never expect unforeseen sudden changes to appear. Like for example, the recent change in the Government’s policies in tightening the eligibility of work passes has affected SMEs significantly. And what about customers who bought large amount of products from you have suddenly disappeared and has not paid up? And what happens if your machine suddenly catches fire and you couldn’t meet the deadline for delivery?

Besides these challenges, you must also be prepared for unforeseen increases in expenses like transportation or rental, which if are not handled properly, might result in constant negative cash flows and eventually business failure.

Exit Plan:

Like how you started, all business owners will have to face the prospects of exiting a business. This has to be included in your business plan from the beginning and not at the end of your business life. Be it decreasing profits, changes in health or personal goals, retirement, gifting it to employees/friends/family or cashing in on your success, it has to be done in a proper way, fulfilling your legal obligations and paying up your debtors and the salaries of your employees. Consider your options carefully. Do you want to sell your business to third party, sell to other owners or partners or transfer ownership to your family or friends or employees or close it down? Do make sure that you have fulfilled all legal and non-legal obligations like settling outstanding tax liabilities with IRAS, striking off your company with ACRA (Accounting & Corporate Regulatory Authority), closing your banks accounts, clearing all assets and liabilities, etc.

Whichever option you choose, it is either ‘Go’ or ‘Grow’ and there can be no status quo.

Conclusion:

Many young people lack focus or determination and tend to overload themselves with too many projects or give up easily. Focus on one project at a time and one advice is to not focus on how much money you will make, but rather, find something you are passionate about. Some young entrepreneurs will come to a point where they lack self-belief and start questioning themselves whether they treading on the right path and feel uncertain or fear about the future. If you are passionate about what you do, you will spend time beyond your work to do it. You will not only need passion but drive, determination, positivity and hard work put in as well to succeed. Talk to an experienced *business consultant or a business mentor who can guide and help you grow your business.

* Angela Chai of Highlight Business Services has mentored more than 2,000 business owners / entrepreneurs since 1990, analyzing the financial health of her clients’ companies to assist them in management decisions that will help to grow their businesses. She not only provides sound and professional advice relevant to business owners’ needs, she is also a source of motivation for entrepreneurs leading to many wonderful start-ups. With her experience, enthusiasm and dynamism, entrepreneurs and investors in Singapore and abroad highly recommend her.

Dorothy Yeng

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