I once had a friend who asked me why I registered my business, especially when ironically, it seemed like I didn’t have much business.
At that time, I earned all of $107 in a year.
What a joke, right?
I don’t deny that. The charges can seem ridiculous.
| Item | Charge | Why do it? |
|---|---|---|
| ACRA Company Name registration | $15 | To ‘reserve’ your name in Singapore’s registry of businesses |
| ACRA Business Profile | $300 | To get an official Unique Entity Number, or to look more legit |
| Business account | $18 per month, with DBS | To get business grants easily |
| Business taxes with IRAS | 75% exemption on the first $100,000 of normal chargeable income; and 17% on the remaining 25% |
Nah it’s not about being a good corporate citizen, but just recognising that it builds your goodwill with the Singaporean government |
When you look at those initial amounts, you might think…
Huh, for what?
Classic.
I thought the same.
Fortunately, at that time, I was in a fulltime salaried job and thought to myself,
Aiya I just won’t take my dates to restaurants. Hawker centre… here we come!
When you’re a smalltime business, you might wonder if there’s any point in registering a company, especially when your revenues are below $24k per year.
You might think that sounds a little too specific. $24,000? Why?
Because that assumes that you’re making an average of $2000 a month from your business, which is often the level which we start seeing business owners begin to think about issues like scaling. Whether you’re selling a product, or a service, $2000 is often the point where you’re surprised.
You’re surprised that you’ve managed to survive, and not die. You’re probably in a place you always wanted to be, making a living from your ‘passion’.
But you’re not enjoying it. Because as you get there, you begin to realise issues like:
- How do I hire someone to help me?
- How do I service my growing number of customers well?
But should you register your business?
Many micro businesses come to this point where they wonder if they should make themselves look more official. That can come with a whole host of problems, such as wondering,
- how do I pay my tax?
- How do I split my corporate tax and personal tax bill?
- How do I do accounting for my business?
- Who do I get for my company secretary? (Secret hack: your mum works)
Put those questions aside. I’m going to give you three reasons why you should register your business.
You get grants from the government
As a business, whilst I can’t say that I’ve gotten alot of grants from the government, they have been enough to bring me to the next level of business.
The grants I’ve gotten from the government so far are:
| Grant | Value | Why it helped me |
|---|---|---|
| Productivity Solutions Grant, that gave me 80% subsidy off a yearly Zoom subscription | $120 | How could you survive 2020 without Zoom? |
| Productivity Solutions Grant, that gave me 80% subsidy off a new Lenovo Laptop E14 | $1500 | What can you say to a new laptop? |
| Career Trial Grant, under Workforce Singapore, which has allowed me to place 5 different people on career trials, and which paid for their salaries of $1200 for a month | $6000 | It gave me a cost-efficient way to get manpower, at a rate that was not hard for them to stomach |
| Go Digital Grant, under IMDA, which has allowed me to have 50% off a team of 5’s Google Workspace Accounts | $240 | For the first time, we don’t look like scammers with random Gmail accounts! |
| Go Digital Grant, under IMDA, which sponsored 6 months of Xero, an accounting solution | $174 | It gave me a way to keep track of my accounts, rather than having it scattered all over the place |
| E-invoicing solution from Datapost, which gave a $50 incentive for the first invoice sent out, and $150 for the next 9. | $200 | It automated my invoicing |
You look more credible if you’re a B2B service
If you’re a B2B service business, you deal with businesses. And businesses buy from people they trust. Many times, we think that businesses buy the cheapest.
Not all do.
Many buy outside solutions because they want something more reliable, but also something that doesn’t cost a bomb. As a B2B service, you need to balance that dichotomy between reliability and value for money.
Think about it.
Before we started our web development business, our main business was writing articles. As a complete noob in the field, I didn’t understand why businesses would hire or pay me, when they already had marketers in-house.
It just didn’t make sense. Why couldn’t they ask their in-house marketing team to do it?
One day, the boss of an online media company finally spilled the beans.
You do something that we can’t do. Like our team doesn’t really understand social issues. But you do. That’s why we booked you.
That’s when it made sense. Businesses want someone who can reliably deliver the outcomes they want.
But businesses also want someone they trust to deliver the goods,
- on time,
- on scope
- on budget.
I know, it sounds like they want everything!
But when you first start, you have to put up with it.
Having an ACRA number was a game changer for me in approaching businesses
That’s where your Unique Entity Number (UEN) comes in. Before I had a business registration number, I would send cold emails to people, and hear nothing.
Even getting them on a no-obligation call was tough.
But when I started putting my UEN at the bottom of my email, it seemed to spark an uptick in people who were willing to have a first conversation with me.
When you buy your own domain, rather than having it hosted on a XYZ.wix.com, it also shows that you’re serious about this.
Honestly, how would you feel, if your dentist came to you without even a shopfront, and offered to do your teeth, in your home?
Don’t tell me that analogy doesn’t work. Because you pay your dentist $80 to fix your teeth, and you’re asking a business for much more, probably.
And your website is your shopfront.
If you’ve none of that, why should people book you?
It doesn’t take that much time, really.
One of the top reasons solopreneurs tell me stops them from setting up a company is the time taken with the legalities involved.
Honestly, Singapore is one of the easiest places to set up a company, especially if you are Singaporean.
Within 15 minutes of logging into ACRA, you can get a unique entity number.
Within 2 weeks of lodging your bank application (this was with DBS), you can confirm your business banking account.
Taxes, are not that hard. Forget about the mailers that tell you about the accounting solutions offered.
Nah. You can do it yourself. Just keep clear records of:
- Income
- Expense
- Savings
Stop asking how much, just do it
Getting an ACRA number was a game changer for me.
For the first time, I began to be prouder of the business I owned, however small it was. Because it’s true. When you first start, it can feel like your business is small and insignificant, and almost as if it didn’t matter.
Getting a company registration number helps you take yourself more seriously too.
Don’t underestimate what you’re doing.
Just get it. You won’t regret it.