The 10 Worst Businesses to Start in Singapore in 2023

Introduction

Singapore is known for its vibrant business environment and numerous opportunities for entrepreneurs. However, not all business ideas are created equal. Some industries are more challenging to succeed in than others due to various factors such as high competition, low profit margins, and regulatory barriers.

This article explores the 10 worst businesses to start in Singapore, providing insights into the challenges and pitfalls associated with these ventures. By understanding the risks involved, potential entrepreneurs can make informed decisions and avoid costly mistakes.

1. Garment Manufacturing

• Pain Points: High labor costs, intense competition from low-cost countries, volatile raw material prices, and changing fashion trends.
• Motivations: Low entry barriers, established supply chain, and potential for scale.
• Figures: According to Enterprise Singapore, the textile and garment industry in Singapore declined by 1.5% in 2021.

2. Brick-and-Mortar Retail

• Pain Points: Rising rent costs, increased online competition, changing consumer preferences, and labor shortages.
• Motivations: Physical presence, customer interaction, and brand building.
• Figures: The Retail Sales Index (RSI) in Singapore declined by 10.6% year-on-year in Q4 2022.

3. Traditional Food and Beverage (F&B)

• Pain Points: High operating costs, fierce competition, low margins, and labor-intensive operations.
• Motivations: Strong demand, diverse cuisine, and potential for revenue growth.
• Figures: The F&B industry in Singapore generated S$7.4 billion in revenue in 2022, but the average profit margin was below 10%.

4. Taxi and Private-Hire Vehicle (PHV) Services

• Pain Points: High competition from unlicensed drivers, regulations and licensing requirements, and fluctuating fuel prices.
• Motivations: Potential for flexible hours, self-employment, and additional income.
• Figures: In 2022, there were over 90,000 licensed taxi and PHV drivers in Singapore, leading to increased competition.

5. Real Estate Brokerage

• Pain Points: Low commission rates, volatile property market, high competition, and regulatory compliance.
• Motivations: Potential for high income, flexibility, and access to exclusive properties.
• Figures: The average commission rate for real estate agents in Singapore is around 2%, which is lower than in many other countries.

6. Event Planning and Management

• Pain Points: Seasonal demand, high upfront costs, reliance on contractors, and fierce competition.
• Motivations: Creativity, social interactions, and the satisfaction of organizing successful events.
• Figures: The event planning and management industry in Singapore is highly competitive, with over 1,000 registered companies.

7. Photography and Videography

• Pain Points: Saturation of the market, difficulty in differentiating services, low profit margins, and the need for specialized equipment.
• Motivations: Artistic expression, creativity, and the opportunity to capture memorable moments.
• Figures: According to Statista, there were over 6,000 registered photographers and videographers in Singapore in 2022.

8. Direct Sales and Network Marketing

• Pain Points: Negative perception, high dropout rates, legal and regulatory challenges, and limited earning potential.
• Motivations: Flexible work arrangements, the opportunity to build a team, and the potential for passive income.
• Figures: The direct sales industry in Singapore has been declining in recent years, with many companies facing legal and reputational issues.

9. Wedding Planning and Services

• Pain Points: Short-term demand, high upfront costs, low margins, and intense competition.
• Motivations: The joy of helping couples create their dream day, creativity, and the satisfaction of executing a flawless event.
• Figures: The average cost of a wedding in Singapore is around S$30,000, but the profit margins for wedding planners are typically low.

10. Online Advertising and Marketing

• Pain Points: Increasing competition, ad-blocking software, volatile market dynamics, and the need for specialized knowledge and skills.
• Motivations: The potential for global reach, targeted advertising, and scalability.
• Figures: While the digital advertising market in Singapore is growing, the competition is fierce and many small businesses struggle to compete with larger players.

Tips for Choosing a Business Idea

While the businesses listed above are generally considered less favorable for entrepreneurs, there are numerous other factors to consider when choosing a business idea. Here are some tips to help you make an informed decision:

• Identify your strengths and weaknesses: Determine what you are good at and what you enjoy doing.
• Research the market: Conduct thorough research to understand the industry, target audience, and competition.
• Consider your financial situation: Ensure you have the necessary capital and resources to start and sustain your business.
• Be realistic about your expectations: Understand the potential risks, challenges, and rewards associated with starting your own business.
• Seek support and advice: Consult with mentors, advisors, or business organizations to gain insights and support.

Conclusion

Choosing the right business idea is crucial for the success of any entrepreneurial venture. By understanding the challenges associated with certain industries, potential entrepreneurs can make informed decisions and avoid costly mistakes. While the 10 businesses mentioned in this article are considered less favorable, there may be circumstances where they could be viable with careful planning and execution. Thorough research, realistic expectations, and a strong business plan are essential for overcoming the hurdles and achieving business success in Singapore.