Singapore Entrepreneur - Aspiring Entrepreneur's Forum

I have chanced on a forum website set up by some aspiring Singaporean Entrepreneurs. I posted a couple of messages there. It's rather heart-warming to see the spirit of Entrepreneurship in Singapore is still very much alive. Feel free to visit: http://www.ssuf.biz/

Singapore Entrepreneur - Is the World Economy Recovering?

The International Monetary Fund (IMF) has forecast the global economic growth at 3.1% for the year 2010, compared to a dismal -1.1% in the year 2009.

Asia, led by its growth engines China and India, is slated to outpace its US and Europe counterparts. This year, China alone is expected to emerge at 8.5% growth amidst a global recession. This feat is mainly attributed to its government stimulus package and continual strong domestic demand. Developing economies like ASEAN stands to benefit from these powerhouses.

On the other side of the globe in US where the epicentre of the financial tsunami is, growth has been laggard for this year. No clear signs of recovery has emerged. Same is felt in most European economies. High unemployment rate is still being faced in these countries. It will certainly take at least another year of two for the US and Europe climb back its their pre-crisis levels.

Although the decoupling effect theory has been in the talks for some years, the impact of the US economy on the rest of the world will, nevertheless, still be great.

In this year alone, we have witnessed the equity markets rising to as much as 80% from their lowest points. Asian markets have seen the most spectacular gains in anticipation of their quick recovery.

But are all these rises sustainable? Could we see another bubble or start of a W-shape recovery, as depicted by some analysts?

One argument point about the unprecedented recovery of the global market is that most governments' stimulus packages have taken effect. So whatever improvements we have witnessed are all artificial and may not be sustainable. How much more can governments continue to "feed" their economies until they can be back on their feet again?

Nonetheless, Asia is still slated to emerge strongly from this deepest recession in 70 years. Economists and analysts have unanimously agreed that any next bet would be on Asia. The spectacular rise over the last few months in Asia markets is mainly attributed to new investment monies entering from US and Europe.

In Singapore, many counters have risen from undervalue to fair or overvalue. In the short term, analysts are divided over which direction the Straits Times Index (STI) will head.

My analysis on the current trend is that most counters have been fully valued. All earnings have already been factored into the current price. Today's STI Price over Earnings (P/E) ratio stands at about 21x. It is no longer cheap as compared to the above chart (courtesy of Bloomberg), showing the historical STI P/E. The direction of the index will really depend on the earnings announcement for the last quarter and also any development in the US economy. A small correction may be eminent in the near future. It should be healthy for the market to cool off speculation. For long term investors, the current price is still reasonable for future growth. As for short term investors, be on your toes when looking into the suitable price to enter. Don't get caught up by a sudden correction.

Singapore Entrepreneur - What's My Strategy

In May, I wrote about my investment strategy which worked during the doldrums in the stock market for the past one year. My returns for the past one year is on par with the Straits Times Index which has since regained about 60% from its low in Oct 2008.

Today, we are seeing a relentless rally of of regional markets, including Singapore's. It seems the long anticipated correction is not ready to show itself anytime soon. Anyway, I have again tweaked my investment strategy since those counters I have been investing for the past year have been constantly on the uptrend which saw very small swings in recent months. I now stay on the sidelines and await a dip in the counter and grab them at current low price. I then hold them longer, between one and three months. With the current momentum, I believe the STI will continue to grow albeit a correction may be round the corner.

Singapore Entrepreneur - Some Corporate Tips

I have been preoccupied with my work that I have been unable to update my blog for the past 2 months. Usually, we are quite busy in the last quarter of the year as most corporates are clearing their budgets before their financial year closes. Existing projects must be completed and signed for clearing of invoices and new projects are quickly awarded to exhaust their remaining funds. If these finance departments do not finish up their funds for the year, the board of directors will start questioning on unfinished funds and will consider cutting budget for the next financial year. So, as a Division Director of an enterprise, who would want budget to be cut? This is a common practice amongst corporations. Vendors like us would certainly stand to benefit from such a culture.

Although it sounds like business is good at this time of the year, there are many internal issues that need to be sorted to face the surge in projects. It is a good problem to solve. But if things are not managed and planned properly, then disaster will befall. Sales people must keep the other departments informed of incoming or potential deals, technical people must prepare for logistics and resources and project budgets must be well-defined. When orders start pouring in, it is expected that things may get quite messy and people getting frustrated. Such unpleasant matters must be managed and contained. Regular meetings must be conducted to keep everyone updated and team leaders to keep tabs on members. Ultimately, with a proper system carried out, usually problems will be solved along the way. But most importantly, customers must not feel neglected and marginalized. If a problem cannot be fixed in time, it should be made known to the customer. It should be discussed and proposed to the customer on any alternative solution. This is called managing customer's expectation.

Singapore Entrepreneur - Venturing Out on Your Own Business

Any business venture needs some in-depth study on the risks and opportunities. Here are some topics which may provide you with some guidance to ponder about.


Capitalize on Your Strength


When you wish to embark a your own business, it is best to capitalize on your own strength and experience. Try not to explore into uncharted territories without any prior studies as the price to pay is usually very high. You will find yourself in best form when you do the things you are familiar and like. If you don't think if you are a qualify to be a gastronomist, you'd better not be in food business just because you think the money is lucrative.

Be Focused, Be Professional


Companies are usually identified by their respective products or services. When you think of Honda, you think of cars. When you think of HP, you think of computers and IT services. Start your business focused in a certain area so that your customers can identify your company to the services or products they want. Don't be too diversified in your services just because you want more revenue. It not only makes you lose your focus but also customers would not have assurance that you are putting enough attention in the particular field.


When you are focused in your area, you would inevitably become an expert in that area. That is called professionalism. For example, if you set up a business that focuses in repairing computers, you would be the best person for the job and no one can proclaim he is better than you. As such, customers would have faith in you and would respect your expertise in the field.


Look at the Demand Perspective, not just the Supply Perspective


I feel many people who yearn to start their own business tend to make a common mistake in analyzing the risks. For example, a friend of mine wanted to bring in some children's boutique from China and set up shop here. He has no prior experience in this line. He claims to know the direct manufacturer of these clothes and their exclusive customer is in Japan. The supplier has offered to provide at factory price and wants him to open a Singapore market. Clothes designs in Japan usually appeal to Asian market and it seems like a good deal. He decided to fly over to Shanghai to talk further with the supplier. Now, looking at this aspect, there are still many things to study and plan before you should decide to proceed further. The most common negligence people make is they tend to indulge in the supply perspective and never thinks of the demand perspective. In today's real world, it is always easy to buy things but the most difficult to sell things. Try googling for any item you think of buying. Chances is that you will usually find the things you want from many websites. The world is so connected that information is so easily available. If you can find a good price with this manufacturer, why can't another person find this supplier and bring in the same types of clothes to compete with you? Once there was an attendee asking me in a motivation class which I was conducting. She devised some recipe on cooking beef patties which tasted uniquely good. Her friends all agreed with her. She was sure it tasted better than MacDonald's and vowed her business will outbid any MacDonald's outlet. I can't agree more that any burger would taste better than MacDonald's. But I cannot agree that taste alone can outbid a competitor. MacDonald's spends millions of dollars in advertising campaigns in upkeeping its brand name. Branding is a very powerful tool in the business world and people are very much connected with brands. Unless she has a similar budget to that, she should just focus on a different target audience who may appreciate the taste of her burgers.

I had my fair share of mistakes when I first ventured out. I had the skills to do great computer programs and could create smart card programs which only big companies could do during then. Equipped with that alone, I decided to form partnerships with my friends and started a company. We started to realize how hard is to convince customers to use our cards even if we offered whole suite of customisations for them. During then, most of them were connected with more well-known industry suppliers. We paid heavily for our lessons.

So before deciding to bite the bullet, do put more emphasis in studying how to create a market for your product and how to protect and differentiate yourself from competitors. You have to understand how the industry works in the first place before making the plunge.

Identifying a Market Gap

In the world we are living in today, everything seems to be complete. Whatever humans can supply, we have it. Computers, cars, planes, telephones, etc. The world will continue to operate even without the existence of you. So, it appears that there is no room for you to create any business for the world. That is what most people think. If you are the odd one out, and choose to think otherwise, you have the making of an entrepreneur. Identify a market gap is not an easy task. It takes experience and vision to create a demand from a gap in the market.