Are you looking to buy a business in Singapore? If so, it’s important for you to read on before you dive right in and sign the cheque. While the idea of buying a business in Singapore is gaining traction, buyers (Especially people with no entrepreneurial background) may end up regretting it.
You may be wondering why is that so and there are myriad reasons for it. From not having sufficient financial resources, to acquiring the wrong type of businesses or not possessing the right qualities to be an entrepreneur.
Below are 5 insights that can steer you away from these costly missteps:
1. Your Objective
Understanding your objective is the first step towards buying a business in Singapore. There are many reasons why people buy business in Singapore. If you are looking for a hassle-free way towards wealth accumulation, buying a business is probably the worst approach in most cases. Unless you have somebody who is willing to run it for you and has skin in the game.
If you are looking to buy an e-commerce business, it makes sense to talk to an e-commerce entrepreneur to understand the opportunity, risks and resources required. Don’t just read blogs or watch YouTube videos. Asking contextualized questions based on your own situation is priceless.
Tip: Talk to relevant people and ask questions!
2. No Money, No Honey!
This is for people who have no prior experience in entrepreneurship. It can be a challenge understanding the importance of having sufficient working capital / liquidity to winter through lull period or making CAPEX investment.
It’s common to under budget when it comes to acquiring a business. Areas that are commonly overlooked includes working capital to cover at least 1.5 times cash conversion cycle, budget for increased marketing expenses, hiring new headcount, new asset purchase (especially for F&B, manufacturing and hospitality) and contingent funds to cover unexpected events.
Tip: Work out the major expenses, payment terms and the cost of your expansion plan before you takeover business in Singapore.
3. Are You Suitable?
Most people have no idea how stressful it is to run a business, especially if you have no prior entrepreneurial experience. You will face common issues like loss of sales, customer complaints, missed delivery from suppliers, employee unexpected resignation or landlord not wanting to renew the lease. All these events will have a big impact on your business, and subsequent profitability. This can be stressful and will take a toll on your well-being overtime.
Are you able to cope with stress while working on your business? Do you have the initiative to anticipate and solve problems, rather than depending on your colleagues? Will you take it out on your employees or loved ones when the sh*t hits the ceiling fan?
Tip: Watch Forest Gump Movie
4. The Scale of Your Business Is Determined by The Depth of Your Skills!
Most small businesses require 2 main skills to operate at its most basic level, operational skills and GTM (Go-To-Market) skills. For example, if you run a small restaurant, you need to know how to cook. While hiring a cook may sound feasible, having someone with no skin in the game may hamper the business growth during this early stage.
For any business to survive, the owner need to figure out a way to acquire customers efficiently. Whether it is running Facebook ads, making cold call, putting up banners or referral partnership etc. If the new owner is not skilled in sales & marketing, he/ she will have to hire someone to do so. It can be a challenge hiring an effective sales or marketing person at this stage.
Tip: Buy business only when you have the right skillset to grow it. Or at least, partner with someone who can.
5. Work with a Business Broker in Singapore
Buying a suitable business to operate is more complex than buying a property. The deal can easily cost more than a property. As such, it typically takes a longer time to identify and buy a business in Singapore. Such deals may not be published on marketplaces, unlike real estate listings which can be found easily on Property Guru or HDB.
A Singapore business broker can not only refer you deals based on your criteria. They can provide you with insights and advice on the business acquisition, and the necessary resources for the deal to go through.
Bonus Tip: Have a call or F2F meeting with a business broker. If the business broker has prior experience in starting up their own business, this would be an added advantage. Some experience is worth its weight in gold. It’s as good as having an ally on your side!
Conclusion
Whether you are looking for business to buy in Singapore or starting your own business, it makes sense to talk to an experienced entrepreneur. It will save you time and money in the long run. You can start by talking to a Singapore business broker today!
Next Article: 6 Reasons Why People Buy Business in Singapore
Whether you are selling business in Singapore or looking for business to buy in Singapore, let’s connect for a call today!
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