Starting a business isn’t quite the same thing as buying a winning Toto ticket, though it can seem that way when you’re daydreaming from the confines of a cubicle. For every towkay you see in a Ferrari there are 3 failed ex-businesspeople picking up the pieces of their shattered hearts.
Here are 5 lessons to learn from failed businesses in Singapore from the lips of the founders themselves.
1. Don’t Try To Juggle Your Business And a Full-Time Job
Singaporeans generally have a low risk tolerance when it comes to starting businesses (strangely enough, this doesn’t seem to apply to gambling). So many try to start side businesses while they’re working full-time in hopes that their little venture will make it big and they’ll be able to smugly quit.
The problem is that running a successful start-up is, quite simply, hard, time-consuming and not something you can just do on the weekends.
Karen, a 31-year-old bank analyst, started a small jewellery label while still holding on to her day job. While her side business saw a modicum of success at the start, it later floundered when she was unable to dedicate enough time to promote it.
“To this day, I still believe my brand could have succeeded if I had quit my job and gone all out to promote it and expand my product range,” laments Karen.
2. Don’t Be Too Afraid To Invest Money In Your Business
Nobody wants to sink their entire life savings into a business that nobody believes will work.
But unless you can find investors, under-financing is going to make it very hard to scale your business.
Judith, 26, set up a shop retailing youth fashion using some of her own savings. However, as her resources were limited, she was afraid to spend too much money renovating her retail space and promoting her products. She created a website on Blogspot as she didn’t want to hire a web designer.
She finally abandoned the business at the end of her lease and blames the lack of design and promotion.
“On hindsight, branding, design and promotion are crucial to a business in the fashion industry. I regret not investing more money to build my brand,” she says.
3. Make Sure You’re Not Infringing Any Regulations
When Theodore, 34, decided to start his own recruitment agency, he was confident he would be able to break even within 6 months.
He did even better than expected, and within 2 months his business became profitable.
However, 6 months into the business, the Ministry of Manpower clamped down on Theodore’s business. It turns out he tried to cut corners by not registering for an Employment Agency Licence, which all recruitment agencies are obliged to obtain before commencing business.
Theodore wanted to avoid paying the $60,000 security deposit required of licence holders and ended up losing his business.
4. Have A Firm Understanding Of The Business Even If You’re Hiring Other People To Do The Work
Together with a few partners, 35-year-old Bobby set up a web design agency.
While Bobby had the creativity of a nail and had no idea what “HTML” or “CSS” stood for, he thought he would be fine, as he and his business partners just planned to hire a stable of designers to do the dirty work.
Ultimately, the business folded. Although Bobby and his partners thought their sales clout would be able to draw in the crowds, they were unable to sell their services effectively as they had no understanding of the web design business.
And their best employees, seeing that their bosses wanted them around only to make money and had zero creative vision, soon left for greener pastures.
Have you learnt any hard lessons pertaining to business? Let us know in the comments?