How to Start a Small Business in Singapore: A Practical and Inspiring Guide for Aspiring Entrepreneurs

How to Start a Small Business in Singapore: A Practical and Inspiring Guide

Starting a small business in Singapore is one of the most exciting yet demanding journeys a person can undertake—many dream of becoming their own boss, building something from scratch, and achieving financial freedom. However, the harsh reality of the entrepreneurial journey is something everyone needs to recognize. More than 20% of businesses fail and shut their doors within the first year, while more than 60% end their operations within the first three years. These statistics are an overview across various industries. Some industries, such as F&B, retail, and certain service sectors, may face greater competition and thus be more susceptible to failure.

Passion alone is not enough — business ownership demands resilience, planning, adaptability, and proper guidance. Singapore consistently ranks as one of the world’s easiest places to do business. With its strong infrastructure, transparent regulations, and supportive government policies, it’s no surprise that entrepreneurs around the world are drawn here. Yet even in such a favorable environment, many businesses fail within their first few years due to poor preparation, weak financial management, and poor compliance. You may think that these are just pure “paper” or "theoretical" analysis that isn’t practical. In essence, many businesses failed due to poor cost management, poor pricing decisions that led to inadequate returns, and oversight of key expenses (especially rental and non-controllable expenses).

At OakTree Accounting, we’ve walked this path with countless clients — from their first spark of an idea to their first customer, and eventually, their first million in revenue. This guide distills that experience into a step-by-step roadmap for aspiring business owners on how to start a small business in Singapore —and, more importantly, how to sustain and grow it.

1. The Preparation Phase

Every successful business begins long before incorporation. The preparation phase is where clarity, research, and foresight form the foundation of everything that follows. It usually starts with an idea, an event or a random encounter.

a. Spotting an Opportunity

A good business starts with a good idea — but not necessarily a groundbreaking one. You don’t need to invent the next iPhone or the next Grab. Instead, this could be any product or service that solves a real problem or fills a gap in the market.

In Singapore’s competitive landscape, opportunities often lie in niche needs or under-served communities. It could be a specialty café in a growing neighborhood, a tech solution for SMEs, or an online business offering valuable services that simplify daily life.

The key is identifying strong demand or limited supply — and having the capability to deliver value consistently. While this may sound easy on paper, accurately forecasting your business idea’s performance is often difficult. There are many variables and factors to consider, and that is where research comes into play.

b. Research in Depth

Once you have an idea, research is your compass. You must understand both yourself and your market. Ask: What are your personal strengths, weaknesses, and risk tolerance? Who are your potential competitors, and how do they position themselves? What trends, technologies, or regulations may affect your business? What are good business structures to consider?

This phase is about aligning your capabilities with market reality. Perform market research not just from online sources, but also reach out to industry experts or others with experience. Ask a lot of good questions and ensure you define yourself clearly. Let us use a noodle shop (F&B Sector) as an example.

Is my noodle shop targeting the general public or office workers? What are your consumers’ average spending powers? Are there competitors? If so, how is my bowl of noodles different from the one at the stall just across the street? What is the crowd like during the peak and off-peak hours?  How are fixed costs and other cost changes going to affect the returns?

A well-researched idea reduces risks and increases your chances of long-term success. Having done your research, it is important to put it into a business plan, which will be the foundation of your entrepreneurial journey.

c. The Business Plan

Think of your business plan as your GPS — it keeps you on track while allowing detours when needed. A good business plan should include the following:

i. Finance & Budget

Plan your finances with both optimism and realism. Identify your startup costs (incorporation, renovation, website, marketing, staffing) and project your cash flow. Many new entrepreneurs underestimate expenses, especially when prices start to deviate from the original plan. If you are a manufacturing setup, your material costs can vary widely, especially if they are closely tied to commodity prices. Similarly, if you are looking to set up a laundry shop, there are machinery maintenance fees that are integral to the business, but you may not have much control over their prices if they increase.

The financial and budgetary sections of your business plan determine how much capital is required, when the breakeven point is, and what your return on investment is. All businesses are profit-driven, and we are sure you are looking to build one that delivers substantial returns. But how many companies actually consider finance and budgeting in their business plans? How many businesses actually even do up a business plan? That is when OakTree’s advisory steps in to assist you in devising a sound, practical, and realistic business plan.

ii. Hardware, Software, and licensing

Consider your infrastructure: office or retail space, IT systems, and tools. For certain businesses, infrastructure could be a heavy capital outlay. This could range from an expensive barista setup in a café to printing machines for a printing company to an automated production line for a manufacturing plant.

In today’s digital environment, investing in reliable software tools saves you headaches down the road. This may range from an inventory management tool for e-commerce companies to a point-of-sale system for retail businesses, or other key IT systems or subscriptions that are integral to your business.

Another key area would be licensing. Some businesses are regulated and may require special licenses, permits, or certifications to operate. Home business owners may enjoy great flexibility, but be mindful that home businesses also have their restrictions, and it is best to be well aware of the dos and don’ts for your business. 

When combined, both hardware and software investment forms the foundation of a business. They are often large outlays or continuous subscriptions that could be essential for your business. Factoring them into your business plan is one way to ensure all key expenses are captured and to better understand how to price your product.

iii. Human Elements

Your business is powered by people — your partners, team, suppliers, and customers. Choose wisely and build a strong network. Build relationships based on trust and reliability. The early phase is not just about hiring talent; it's also about finding the right collaborators who share your vision.

We have clients who wish to expand into nearby nations, and we are pleased to share these contacts with them to facilitate the establishment of a business on an international stage. While international expansion may be early, we do provide advisory services, a strong network, and, of course, the support you require as a business partner in meeting compliance and regulatory requirements.

2. The Execution Phase

With preparation complete, it’s time to bring your business to life.

a. Incorporation and Getting Your Business Up and Running

The business registration process in Singapore is straightforward, but getting it right from the start matters. You’ll need to choose a business structure (sole proprietorship, partnership, or private limited company), appoint directors, file incorporation documents, select the company's constitution, and meet ongoing statutory requirements. Our corporate secretarial services ensure your business meets all ACRA requirements — from company registration to annual filings — so you can start strong without compliance worries.

After incorporation, you’ll move into a practical setup: corporate bank account opening, renovation, website development, logo design, social media setup, digital marketing, and preparing your operating systems. There may be other business necessities such as loan, licenses and permits applications and insurance which are key business functions and for most of these, we are able to provide valuable contacts that can assist with your requirements.

For certain businesses, assembling your human resources will also be as integral as marketing plans. From Central Provident Fund (CPF) compliance to the different types of employment passes, you will probably need an expert to offer you advice on manpower policies and the recruitment of foreign workers. At OakTree, we provide comprehensive HR advisory services to ensure a local company's HR operations comply with the requirements of the Employment Act.

b. Preparing for Your First Customer

Before your doors open — whether physical premises or an online presence — ensure your internal systems and processes are well in place. Preparing for your first customer is exciting, demanding, and usually contains some hiccups (let’s be frank – you rarely can be perfect on your first hit). We advise clients to run a dry run to ensure the general frameworks are in place and the experience for your first customer is pleasant.

i. Systems and Processes

Set up proper accounting, payroll, and tax systems early. Yes, we are not saying this just because we are an accounting firm. Many business owners think that these are simply for compliance requirements. However, financial figures are more useful than most people realize. (Ask yourself why the big firms always insist on monthly closing?)

Without this foundation, businesses often lose sight of their financial health until it’s too late. Having a system to record your financial figures is akin to documenting your business performance. Imagine you are training for a 200-meter race, but you have never used a stopwatch to time yourself!

ii. Product or Service Quality

Your first impression is everything. Make sure your offerings meet (or exceed) the standard you’ve envisioned. A single negative review early on can derail your momentum. The first few months are usually crucial for setting the proper quality standards. When consumers decide to give you a try, it is the best time to win loyal, returning customers. (This may not work if your service or product is in a one-time off scenario.)

iii. Marketing and Sales

In the digital age, marketing is not optional. Build a simple but effective online presence through your website, Google Business Profile, and social media. Be consistent, authentic, and customer-focused.

Speak to professionals in the marketing industry, and they will tell you that digital marketing has become more of a necessity than a competitive edge. Everyone needs it, and having it doesn't make a company special; it just ensures you don’t lose out.

The marketing approach is also something everyone would wish to consider. Some industries still rely heavily on print marketing, others do Facebook advertising, while professional industries may turn to traditional networking to market their services.

Either way, marketing is integral to a business's ability to reach consumers. A good product that nobody is aware of will take a long time to build sufficient traction solely through word of mouth. Hence, it is essential to consider your business’s marketing strategy and plans carefully.  

iv. Perform a Dry Run

Before your official launch, test your operations end to end. Simulate customer interactions, test your payment systems, and check delivery processes. Fixing errors early saves costs and reputation later.

This will also allow you to rectify errors, make improvements, and identify operational bottlenecks.

c. Welcoming Your First Customer

This is the moment you’ve worked for — but it’s also the most essential learning phase.

i. Customer Service

Deliver exceptional service. The first few customers are more than just transactions —they are your early ambassadors. Their satisfaction determines your reputation. Ever wonder why there are so many launch promotions in the retail and F&B sectors? Every business wishes to start with a surge of satisfied clients, as these customers are the first and most obvious source of direct marketing.

ii. Refine Your Sales Process

Track how customers find you, what questions they ask, and what made them buy. Collect feedback, communicate with your customers. This is the time to listen and use these insights to refine your pitch and improve conversion rates.

This may also be an essential opportunity for businesses to rectify areas that they overlook. The true value of customer feedback is that it furnishes you with the most authentic consumer perspective, away from the business owners’ perspective. A good example is that the pink variant of a water bottle is out of stock within the first fortnight, but the other colors have virtually no turnover. If this deviates from your initial expectations, you may want to look deeper.

iii. Delivery and Feedback

Ensure smooth and timely delivery of your goods or services. Always follow up for feedback — both positive and negative insights help you improve.

3. The Monitoring and Improvement Phase

Launching your business is only the beginning. Sustainability depends on continuous monitoring, evaluation, and adaptation.

a. Establishing Financial and Non-Financial Metrics

Create measurable KPIs — both financial (revenue, profit margins, expenses) and non-financial (customer satisfaction, turnaround time, repeat rate). These metrics form the backbone of decision-making.

As mentioned, Singaporean small business owners usually overlook the importance of financial monitoring, planning, and forecasting. How often do you hear big-name restaurants, old-school restaurants, or cafés close their doors, citing high rents, rising ingredient costs, and a manpower shortage as reasons?

At OakTree, we offer businesses a wide range of business solutions. While we can’t guarantee you will thrive, we increase the chances of you doing well and reduce the risk of business failure.

• Unsure about price setting? We offer a detailed analysis of the optimal price for your goods or services, factoring in all costs.

• Uncertain if the increase in rental makes it worthwhile for you to continue operations? Look for us, and we can evaluate the additional sales you need to make to stay afloat

• Lacking a good manpower solution? Yes, we offer manpower solutions to meet your business needs, whether you need foreign manpower for your renovation business or an IT expert to assist with the development of a new-to-launch application.

Our business advisory, accounting, tax planning, and staff solutions are just some of the many services that support business owners at different stages of their business. Setting the proper metrics is essential so you know which goals need to be achieved.

b. Monitoring Your Performance Accurately

Accurate monitoring starts with good bookkeeping. Many small businesses fail because they skip professional accounting, only to realize years later that they’ve been bleeding cash. A well-maintained accounting system enables you to accurately adjust pricing, identify profitable products or services, manage costs efficiently, and plan tax obligations. At OakTree Accounting, we help businesses implement robust cloud accounting systems and monthly performance reviews — giving you the clarity to make informed decisions at every stage.

The next question for many is, what kind of accounting do our business really need? Monthly Accounting, quarterly, or annual? Most non-GST registered companies can confidently opt for yearly accounting if their goal is simply to be compliant. GST-registered firms will likely need a quarterly account to be GST-compliant.

Business owners who opt for monthly accounting are a rare group who are rightfully insightful. Monthly account reviews make these businesses extremely nimble. If certain expenses are way too high, corrective actions are taken in the very next month. If ingredient costs rise too high and result in a loss, they take action to ensure the bleeding stops early and on time.

Hence, at OakTree Accounting, we always encourage business owners to pay a little more for timely information. It is the same reason why you purchase insurance.

c. Periodical Review and Refinement

The business environment evolves constantly — from market trends to regulatory updates. Review your business plan periodically, identify internal or external changes, and adapt accordingly. Flexibility is your best competitive edge.

Periodic review allows you to alter and amend business plans whenever necessary.

4. The Continuous Cycle of Growth

Business growth is cyclical. Every phase — preparation, execution, and monitoring — repeats with each new opportunity. Stay alert to emerging trends, new customer needs, or even entirely new ventures. Treat every client as though they are your first. Continue improving your processes, refining your systems, and strengthening your foundation. This is how small businesses evolve into enduring brands.

5. How We Can Help - OakTree as your Business Partner

At OakTree Accounting, we believe entrepreneurs should focus on building their businesses, not on managing compliance. We provide end-to-end corporate solutions that support every phase of your business journey:

Company Incorporation and Corporate Secretarial Services – We handle ACRA registration, resolutions, and compliance so you can start right.

Accounting and Bookkeeping – Accurate financial records that empower better decision-making. It also allows businesses to be nimble and respond to abnormalities such as high expenses, lower revenue, underperforming items, or underperforming business segments more quickly.

Tax and Advisory – We assist companies in ensuring compliance with Singapore's corporate tax laws. By having an established accounting software and tax reporting process, we provide compliance and, at the same time, strategic tax planning and filing to optimize your returns.

Payroll and HR Outsourcing – Simplified HR management that ensures compliance and efficiency. Whether you’re setting up your first company or experiencing company growth, our team is here to help you build a business that lasts.

Advisory - Of course, the most critical service that truly helped our client would be business advisory work. Whether it was developing a sound, healthy business plan, resolving an upcoming business challenge through detailed analysis, or navigating complex situations such as restructuring or expansionary plans, we stood by our clients. We did all we could to help them make the best possible decision.

How to start a small business in Singapore – The entrepreneur spirit

From business idea generation and planning to registration and development, the entrepreneurial spirit should be encouraged. The Singaporean government, through its statutory boards such as Enterprise Singapore, is offering various startup grants to spur this spirit. A business-friendly environment indeed makes it easier to set up a business, but we firmly believe that the startup scene requires more substantial support.

Starting a small business in Singapore is not just about paperwork and profit — it’s about purpose, people, and persistence. There are bound to be hurdles, and, of course, it would not be easy (unless you are blessed with ample capital or doing it as a hobby business). With proper preparation, solid execution, and continuous improvement, your entrepreneurial dream can thrive in one of the most business-friendly nations in the world. Let’s turn your business idea into a success story — together. Contact OakTree Accounting today to begin your journey with confidence.

DISCLAIMER: The views and opinions expressed in this article are those of the author and do not necessarily represent the views and opinions of any individuals or organizations with which the author may be affiliated, either in a professional or personal capacity, unless explicitly stated.