Financial Preparations Before You Start Your Business In Hong Kong

If you want to start your business, you need to make a lot of financial preparations to make it happen. While women have a lot of opportunities to work in Hong Kong, there is still a significant pay divide that bothers a lot of the talented ones. According to an article published in the South China Morning Post, more women are trying to become entrepreneurs. Apparently, they are not given the same compensation as their male counterparts. This is not because they are less talented or skilled. It is because they are women.

The truth is, equality between men and women have come a long way – it is evident in the way women are treated and accepted in the workplace. However, you can still see that there is a lot of room for improvement.

The same article revealed that more women are choosing to be self-employed – although there is a decline in women entrepreneurs. They are probably opting to be free from the employment rat race, but they do not like to be burdened with starting their company.

While being self-employed is still remarkable, there is something better about owning your company. The room to grow financially and professionally is greater.

Financial Preparations Before You Start Your Business In Hong Kong

The small business environment in Hong Kong

Being a small business owner in Hong Kong is not as impossible as you think. There may be more men doing it – but that does not mean you cannot hold your own ground – as long as you are passionate about the business that you want to start.

According to the data from Gov.hk, small and medium enterprises are those that have less than 50 employees (non-manufacturing) or 100 (manufacturing) employees. These enterprises represent 98% of the business units in Hong Kong. They can provide an estimate of 1.3 million jobs for various individuals.

If you own your company, you can help other people find jobs. What is more rewarding than that? You will be playing an active role in the economy of Hong Kong. Not only that, you will certainly learn a lot as an entrepreneur than a self-employed individual offering your service and expertise.

According to the data Go-Globe.hk, the distribution of the SMEs in Hong Kong are as follows:

  • 36% Import and Export Wholesale
  • 15% Retail
  • 13% Professional and Business Services
  • 12% Social and Personal services
  • 6% Financing and Insurance
  • 4% Real Estate
  • 4% Information and Communication
  • 4% Accommodation and Food services
  • 3% Transport and Logistics
  • 3% Manufacturing

If there is one sector that you excel in, you may be able to find one that you can start a business in.

Smart financial moves before starting your business

Before you take that first step that will bring you closer to your entrepreneurship dreams, it is important that you make a couple of financial preparations first. Here are some tips that you need to implement before you start a business.

  • Have a business plan.

Never start a business without a plan. You cannot just leave everything to luck. You have to create a detailed plan that will tell you the different steps that you need to take so your business will succeed.

  • Have enough emergency fund.

This is not the same fund that you will use to start your company. This is for your personal use. Most of the time, entrepreneurs will invest most of what they have – leaving their personal finance thin. Do not make this mistake. Have adequate emergency fund because the first few months of your business might not produce enough profit for you to live on. There may be times when it becomes unstable. You need to have this reserve fund to help you survive as you get your company off the ground.

  • Separate your personal and business money.

As you are starting your business, it is very easy to mix them This is also a mistake. You have to create multiple bank accounts that will hold your personal and business money. For one, it will make tax filing and financial monitoring easier to do.

  • Save up for your taxes.

The taxes that you will owe the government will not be automatically deducted from your profits in the same way it was done when you were employed. Make sure you set aside what should be paid towards your taxes. This will help keep your business on the good side of the law.

  • Hire the right professional to help with the financial documents.

If you have no idea how to manage your financial books, hire someone to do it for you. This is not something that you should experiment with.

Being an entrepreneur is certainly a step up from being employed – but you should make sure that you know what you are getting yourself into. Do your research and study your options carefully. And once you are approved for your start-up funding – manage your finances well. It will be tough in the beginning, but soon, you will find yourself going from one profitable venture to the next.

Recommend0 recommendationsPublished in Hong Kong, Entrepreneurship
SHARE
Previous article5 Things Your Friends Say About Personal Loans That Are Wrong
Next articleHow Investments Are Taxed In Hong Kong

Abigail Wong is the Writer of The New Savvy.

She is a Singapore Management University 2nd year undergraduate specialising in Strategic Management. From Tampa, Florida, she possesses an International Baccalaureate diploma from C. Leon King High School, and previously held the position of Treasurer of the King High School Division of the French National Honour Society and the Science National Honour Society. Abigail is currently acting as President of the French Cultural Club for SMU International Connections, and as a Resident Advisor and Fire Warden for the SMU Residences at Prinsep.

Abigail is a Former Florida Science Olympiad Champion in chemical forensics and protein modelling, and former Health Occupation Student’s Association District Champion in clinical nursing.

In her free time, Abigail enjoys interacting and caring for animals. She has previously volunteered for the Humane Society of Tampa Bay as an Adoption Assistant.

@