Starting
a company / business – Planning (Part 1 of 4)
Working for many SMEs and doing business of my own
have made me realise how important planning
is in starting a business. It is a managing perspective and skill
requirement of starting a business.
The equation for starting a business is the same as the skill set for managing.
Planning + Organizing + Leading + Controlling
The equation for starting a business is the same as the skill set for managing.
Planning + Organizing + Leading + Controlling
Here I am going to write about why these four elements are important with real life experience of incidences and issues.
Managing a business is not about when you start a
business. Managing business starts from the time you even begin to start your
business. An awful lot of people think that managing a business begins when you
have an office and people working for you.
Or are operational process of purchasing and selling. In reality, that is not how it works.
Or are operational process of purchasing and selling. In reality, that is not how it works.
Managing your business starts the first time when
you get all the facts, figures, research, and then writing your business plan.
Many businesses do not have a Business Plan.
Without a business plan they do not have a business Mission Statement and Strategy. Many of them do not figure where they would position their business.
These are extremely important elements in starting a business.
Without a business plan they do not have a business Mission Statement and Strategy. Many of them do not figure where they would position their business.
These are extremely important elements in starting a business.
My experience began with a mobile disco business
with a friend (partner). We were young and had no experience. We thought only
about enjoying and making money. We didn’t have a business plan and both of us
were not highly educated (I had only Secondary One and my partner had O
levels). We didn’t have anyone to mentor us and we learn from assumptions and
information.
The mobile disco business had many competitors and
in the 80’s it was a business that was like the Bubble Tea Craze later in 2000s.
The equation was there were not too many mobile disco set-up but there were
lots of parties and functions. From birthday parties to D&D and school
functions even army battalion functions. The 80’s was a time for parties.
To
have more guidance, you could have a check list such as the one that
EnterpriseOne a Singapore government institution link http://m.enterpriseone.gov.sg/en/Business%20Stages/Plan/Business%20Start-Up%20Checklist.aspx
In any case without a business plan or MOU or
agreement our partnership deteriorated. Overall, a good market prospect but with a lack of
direction without a Business Plan,
things can be chaotic.
The drawing board business litmus paper strategy
Today, I do it very differently. I take a drawing board of papers and draw a circle in the middle. I would write all the various ideas from me and my colleague and clients on the white paper. All the ideas that comes to the mind. It does not matter if it looks ridiculous. I just write it in the white paper. From there, we connect all the bubbles of ideas to the main core business purpose. Those ideas that are not related we cancel it later. I call it the drawing board business litmus paper. If the basic necessary requirements are not feasible, we redo the planning stage and if it is not feasible we stopped the planning process and re-draw the plan again.
The drawing board business litmus paper strategy
Today, I do it very differently. I take a drawing board of papers and draw a circle in the middle. I would write all the various ideas from me and my colleague and clients on the white paper. All the ideas that comes to the mind. It does not matter if it looks ridiculous. I just write it in the white paper. From there, we connect all the bubbles of ideas to the main core business purpose. Those ideas that are not related we cancel it later. I call it the drawing board business litmus paper. If the basic necessary requirements are not feasible, we redo the planning stage and if it is not feasible we stopped the planning process and re-draw the plan again.
Business
Plan
The best was described by Entrepreneur : ttp://www.entrepreneur.com/article/83818.
1. It sets specific objectives for entrepreneurs or
manager.
2. It shares your strategy, priorities and specific
action points with your partner and even your future employees have them
understand the company culture and objectives.
3. It helps you would have to do Financial Planning in advance and allocate funds for your fix cost, such as rentals, wages, assets leasing or purchase and so on.
3. It helps you would have to do Financial Planning in advance and allocate funds for your fix cost, such as rentals, wages, assets leasing or purchase and so on.
4. Develops and new business alliance, having
suppliers and clients understand your business, dealing with professionals for
examples like banks, business institutions, investors and even government aid.
5. Helps you understand your own business strength
by evaluating your resources and knowing your strength.
6. Helps you to analyse the future development for
growth.
7. It helps you map the future.
8. Support growth.
9. At times secure funding can be bank overdraft and
bank loans, which may take two years of business existence. Other funding can
be available for new start-ups, such as in the form of family loan or business
angels.
10. It also helps manage cash flow. Monthly cash
flow allocation.
11. It also plans and support strategic exit.
My experience in doing a Mini Mart business in
Jurong was based on a Business Plan and was successful (you could view some pictures of it in my website). The other element was the experience in working as a salesperson in Yaohan Supermarket.
The most important planning process in the Business Plan is the Financial Planning. You could read more about the Business Financial Planning from books. It all depends on your criteria to know which are important fixed expenditure and forecast revenue.
Once the business structure is done the next step would be to register your company in ACRA. The Accounting and Corporate Regulatory Authority (ACRA) is the national regulator of business entities and public accountants in Singapore. It also plays the role of a facilitator for the development of business entities and the public accountancy profession.
Its Mission is to provide a responsive and trusted regulatory environment for business. It was formed as a statutory board on 1 April 2004.
The most important planning process in the Business Plan is the Financial Planning. You could read more about the Business Financial Planning from books. It all depends on your criteria to know which are important fixed expenditure and forecast revenue.
Starting a company – Conclusion Planning an
equation of learning and to gain more knowledge.
Before we move on to organizing we shall take a look at the
purpose of planning. The learning and information gathering stage in fact.
Planning is the part to gain the knowledge of your
business or company set up. It is the most important part in starting a company
or business. I use to have one or two pessimistic individuals and ask them
questions on the business and company I would like to start. As I am an
opportunist, it would be better to have someone who is pessimistic about the business, who is full of doubts and to have
the answers to those pessimistic statements or questions.
In these discussions we could use a “problem base
learning” or PBL method in learning how to solve the problems of the new
business or company setup. It develops critical thinking and creative skill in
solving the pessimistic statements and questions. Improves problem solving and
motivates undertaking the project.
Before I went into the mini mart business I talked to the owners whose shops I frequent and made friends. This helped me to get first-hand knowledge of the business from the ground zero perspective. It is like a situated Learning theory whereby I get to socially interact with the players of the business. Although we may be competitors we are not direct competitor as the business is in a different area or town. We become involve with the way the business community of mini mart are being manage.
Before I went into the mini mart business I talked to the owners whose shops I frequent and made friends. This helped me to get first-hand knowledge of the business from the ground zero perspective. It is like a situated Learning theory whereby I get to socially interact with the players of the business. Although we may be competitors we are not direct competitor as the business is in a different area or town. We become involve with the way the business community of mini mart are being manage.
At the planning stage we should have the type of
company setup, name of the company, all the information from the research that
would be in the Business Plan. If you have been following the steps, from the
‘Business Start-Up Checklist, we would be in No 7 of the EnterpriseOne,
Singapore government institution link guide.
Now that we understand the reason and purpose for
planning we can go on to the next stage, ‘Register Your Business’ or organising as our title for Part 2 of 4.
Starting
a company – Organizing (Part 2 of 4)
After planning and writing your Business Plan, you
would need to start organizing the theoretical concepts in the Business Plan to
action plan but before that, we have to choose the right business structure.
You also have to find the name for your business and begin to register your
business.
There are many secretarial companies that handle
these areas for start-ups. We will talk one of them at the end of Part 2 of 4.
In this part we would be looking at (i) Organizing all your plans, (ii) Steps
or checklist and formation of a Singapore Company (iii) choose the right
business structures, and (iv) Registering your business.
By now you would have got the Business Plan, the
name of the company, financial planning of the business needs, objectives and
so on so forth. We now need to have them organized in a form of task. Let’s
have them in a check list format.
- Choose the right business structure
- Having your business / company registered in ACRA. Remember by local Singapore law, if you are a foreigner, you would need to appoint a registration agent. A company secretariat can come in handy for this too.
- Getting a company secretary
- Get a registered address
- Open a banking account
- If your expected turnover is a million dollars, registration of GST is compulsory
- Obtain any business licenses and permits
- Find a office space
Choosing
the right business structure.
There are certain types of structures in business.
These can be found in the ACRA websites too. Here is a summary of the type of
structures.
- Sole Proprietorship,
- Partnership,
- Companies,
- Limited Liabilities Partnership (LLP)
- Limited Partnership
- Public Accountant
You could choose anyone of these structures in
accordance to your business. Most of the details can be found in ACRA websites.
You could do it on your own if you are a Singaporean or engage a secretariat
service if you are a foreigner.
Having
your business / company registered in ACRA
Once the business structure is done the next step would be to register your company in ACRA. The Accounting and Corporate Regulatory Authority (ACRA) is the national regulator of business entities and public accountants in Singapore. It also plays the role of a facilitator for the development of business entities and the public accountancy profession.
Its Mission is to provide a responsive and trusted regulatory environment for business. It was formed as a statutory board on 1 April 2004.
Getting
a company secretary
If you need
support in registering and would want to acquire a secretariat there are many
available. Some have audit service too or may recommend you an audit firm. The
price range depends on many factors and the services you require.
Get
a registered address
All Singapore registered business or companies MUST
have a registered address. P.O. Box address, are not allowed. Some secretariats
do provide a registered address for a fee.
Open
a banking account
After registering you company in ACRA you are advice
to open a company bank account. It would be good if you could purchase your
accounting software with a payroll function that would print the employee
salaries as well. It is compulsory to have printed employee salaries made mandatory
by the Ministry of Manpower (MOM)
Registration
of GST
If your business or company expected turnover is a
million dollar or more, there would be a need to register your company for GST
with the Inland Revenue Authority (IRA). It can be done online.
Licences
and permits
If your company deals with liquors, or chemicals and
such there are requirements to apply for license and permits. There are three
types of licenses.
(i)
Compulsory License
(ii)
Occupational License
(iii)
Business Activities
All these licenses can be obtained from ACRA.
Finding
a office
After all these task of have been done, it’s time to
have a place to start business.
Starting
a company – Leading (Part 3 of 4)
“Management is doing
things right; leadership is doing the right things.”
There is a difference between leading and
managing. In this stage we will talk about leading which is doing the right
things. The next one or stage, when we come to control it is more about
managing, which is doing things right.
This is the stage where the new start-up will have
few people working handling and many task. It is also a stage where budget gets
really tight that sometimes due to opportunity cost there are things that would
need to be compromised.
From the type of furniture and fittings to the type
of paper quality is determine and defined in this stage. Even defining the type
of employees you want to have to build and shape the culture of the company.
Defining the type of HR policies the company would follow or implement. At
times not getting the most skilful and knowledgeable candidate due to financial
obligation and running in a tight budget.
The reason for this stage to be a leading stage is
because most of the process and operations are in its infancy. It is also your
beginning and starting stage. The model may have worked in some other
organisation or business but not in the current business. Due to many factors
it may not run smoothly. Accounting software may be inadequate to do some task,
like for example, creating the type of debit notes or formats or the payroll
software does not have CPF calculated automatically and must be done manually.
Even work process may not be in sequence. Therefore, one must lead with an open
mind for change if the equation or the elements in the equation such as company
policies, culture, processors or operations may not be successful as planned
and need to evolve and change.
This is the stage where entrepreneurs would put
their operations live and all those test and plans may not work in real time.
And in this teething period, one must be able to lead the team in the right
direction by doing the things right. Understand the employees, hard work and
the need to change when processors do not succeed.
Each department may have some form of difficulty as
it is the start. Experiences in working for other organizations, can have
successful operational process in other environment or culture but may not work
in this new company. Experience staff may feel disappointed. As many other
emotional influence may take place. Therefore, as an owner or entrepreneur, one
must lead.
Most times LISTENING to those on the ground and
those hands on with the task or work would be ideal. It is the time where the
company may evolve and make changes in accordance and make small allowance and
sacrifice for time.
There are different style and approaches when it
comes to get a job or task done.
(i)
Telling
–
when people or employees are reluctant to do the job or lack skills
(ii)
Delegating
– when employees are willing to get the job done and have the skills and knowledge.
(iii)
Participating
– when employees are reluctant but can contribute and have the skills to get
the job done but need support.
(iv)
Selling
– when employees are willing but not confident that the process would work and
need support.
The diagram below shows the gears of leadership
and management to integrate.
When the process, operations and function have found
the right balance, the management will control processors from then on.
Starting
a company – Controlling (Part 4 of 4)
This
is when the company have fixed all the crisis and chaotic issues in the
beginning (Leading stage). Some entrepreneurs may be good at leading and are
better leaders but may not necessarily mean they would be better managers and
therefore may need a manager to manage and control the day to day issues of the
company. Some may be good at managing day to day issues.
This is the last stage of the start-up. This is the
stage where the company is up and running. It may take a few months or even a
year.
The daily process of regulatory controls, financial
controls, operational controls and HR controls will be now managed on a regular
basis and any troubling issues in processors will not be many as most of the
task would have change to form a smoother process into a Standing Operating
Procedure.
These Standard
Operating Procedures (SOPs) would benefit the company/business:-
(i)
establishing performance standards
(ii)
reporting and monitoring performance
(iii)
identifying performance and managing
standards
(iv)
controlling standards from being deviated
(v) to uphold best
practice and standards
We have come to the end
of the steps of Starting a company. Remember the basic elements in the equation
are Planning, Organizing, Leading and Control.
“Victorious warriors win first and the go to war, while defeated warriors get to war first and then seek to win.” - SunTze
“Victorious warriors win first and the go to war, while defeated warriors get to war first and then seek to win.” - SunTze
