How to Start an Online Business in Singapore

Before you begin the formation of your online company it’s indispensable to have a thorough understanding of all the different aspects that will help your company create a strong foundation. As a result, the very first step is to extensively research and plan to answer questions such as the following:

• What products/services will my business be offering?
• What is my company’s target market?
• Who are my competitors and what has made them successful?
• How will my business be financed and what is my budget?

Important Note: These questions are mere general examples, and should not represent your entire strategy. The planning phase of your company may vary by industry and other factors.

Identify Your Products or Services

Before diving into the world of online business, it is crucial to identify the products or services you plan to offer. A good starting point is to conduct in-depth market research to understand the demand for your chosen products or services.

Once you have identified your niche, consider evaluating the feasibility of sourcing or creating your products/services. In other words, determine whether you will manufacture or provide the products yourself or source them from suppliers/employees. Oftentimes there are a variety of factors that can affect this decision, including production costs.

Define Your Target Customers

To effectively market your products or services, you need to have a clear understanding of your target customers. Start by creating buyer personas, which are fictional representations of your ideal customers. Consider information such as age, gender, location, income level, interests, and needs. This information will help you tailor your marketing messages and strategies to resonate with your target audience.

Analyze the Competition

If your prospective business corresponds to a market that has been present for a long time, it is very likely that your company will face some level of competition, which can be beneficial and detrimental. Although having extensive competition might make it difficult to gain new customers, it can also serve as an analysis point to establish the core goals of your business. By analyzing your competitors, you can find the steps that have led them to success and you can identify gaps in the market that your company can tackle.

Secure Funding

Starting an online business in Singapore may require initial funding to cover expenses such as product sourcing, website development, marketing, and operational costs. Sources of funding can include personal savings, bank loans, grants, and crowdfunding. A very common source of funding is known as private equity funding, which is when private investors buy shares in your company and in return provide capital for financial investments. Additionally, as aforementioned, the Singapore government provides several tax incentives for startups such as the Tax Exemption Scheme for New Startups, which can largely reduce the required corporate taxes for the initial years of a company.