While the idea of buying business in Singapore may seem far-fetched, it’s a lot more common than what we thought. Singapore is a hub for merger and acquisition in Southeast Asia due to its political stability and strong governance.

According to Bloomberg, the value of deals involving Singapore companies since the start of April is up 102 per cent from the full second quarter of 2023 at US$23.8 billion (S$32.2 billion). You can read more about it here.

Given that M&A deals are of bigger scale, the number of ownership transfer among small businesses (SMEs, SMBs and Micro businesses) are likely to be a lot higher and not reported as well. In case you are considering buying a business in Singapore, check out if you fall under any of the 6 reasons below.

1.        Explore Entrepreneurship

For individuals who have been working in a corporate environment, they may want to explore entrepreneurship once they have accumulated a certain level of financial resources and/ or working experience. Given the inherent challenge of starting a business, they opted for a less risky approach in acquiring an existing profitable business.

Source: Exploding Topics and LendingTree analysis of U.S. Bureau of Labor Statistics (BLS) data.

According to FreshBooks, most businesses take at least 2 to 3 years to become profitable. By acquiring an existing business that is already profitable, you are essentially shaving off 3 years in your business building journey. The first 3 years happens to be the riskiest period of a business lifecycle as well.

2.        Retrenchment

If you followed the news lately, you would have come across the following retrenchment taking place among major corporations. Whether it’s the recent retrenchment of 500 staffs by Citibank, 5% headcount slash by Ninja Van or the loss of 1,000 UK based jobs in Dyson. According to DollarsAndSense, Singapore employees need to be ready for retrenchment in 2024.

Based on the latest news from The Straits Time, retrenchments in Singapore fall for second straight quarter and employment growth cools. However, I will take it with a pinch of salt. It’s an open secret that many employers in Singapore (Regardless of their size or location of their headquarter) are retrenching staff without labelling it as “retrenchment” and keeping mum about it.

There are 2 main reasons for that: By not labeling it as retrenchment, they can choose not to make compensation to their affected employees. Secondly, retrenchment carries a stigma and may have a negative impact on the image of the organization. Hence HR tend to exercise discretion and utilize various terms to mitigate the impact. E.g. Rightsizing, Headcount Realignment, Reallocation of Resources, Performance appraisal, etc.

If you knew of someone who has been retrenched yet possess the ability and drive to grow a business, perhaps starting a business or acquire an existing business maybe a viable option after all.

3.        Career Stagnation

It’s very common that after working sometime in an industry or company, your career has plateaued. Every industry and profession have their peak and trough. Perhaps one way to break the glass ceiling is to be your own boss.

Rather than slaving away in a job with no prospect, plus constantly dealing with office politics, Monday blue, ageism, discrimination and things beyond your control. Why not create a career for yourself by buying a business in Singapore? This is one way to give yourself full accountability today.

4.        Vehicle For Wealth Accumulation

After spending a decade exploring many rabbit trails, I start to realize that business ownership is the most realistic way for wealth accumulation. Not stock investment, unless you are Warren Buffett. Not real estate investment, unless you have a truckload of cash and willing to sit on that piece of real estate for the next 3 decades. Not some get-rich-quick scheme, unless your grandfather invested into crypto-currency or durian plantation or who-knows-what 30 years ago.

Starting a business or buying a business in Singapore allows you to potentially earn a good income, while building an asset that can be sold in the distant future. (When you decide to cash out) For some Singapore investors, they may see this as an opportunity to build a passive income.

5.        Change of Lifestyle

Sometimes an individual may decide to have a lifestyle change due to varying reasons. E.g. Health condition, family commitment, pregnancy, preference for a slower pace, relocation, retirement planning etc. In this case, buying business in Singapore is a good option to consider. This allow one to work according to their own priorities while being economically productive as well.

6.        Diversify Business Portfolio

For many small business owners, their existing business provides a source of salary and is their biggest asset. This inevitably represent a major risk to their wealth, hence it’s common for them to explore buying business in Singapore or property. Ever heard of the phrase “multiple income stream”? Same principle here.

A good example is Proctor & Gamble. Founded in 1837 by William Procter and James Gamble, this organization has gone on to acquire at least 80 brands over the past century. Some of their famous brands include Gillette, Oral B, Pampers, Pantene, SK-II, Tide and Vicks. Check out their list of acquisitions and divestment here.

Source: Lutof Qaddoumi/ LinkedIn Post

Conclusion

There are many reasons why people pursue entrepreneurship. Regardless, buying business in Singapore is less risky compared to starting up your own business.

Read Next Article: The Pros and Cons of Buying a Business in Singapore - A Guide For Aspiring Entrepreneurs

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