At just 23, Nicholas Khoo started his own IT outsourcing company and, in four years, turned it into a regional business with 50 employees.
Entrepreneurship is today’s buzzword, but in reality, how many Singaporeans would give up tried and tested routes to success for a dream?
Nicholas Khoo did just that when, at 23, he turned down a place at the National University of Singapore when a business opportunity came knocking at his door. And, far from regretting the choice, he found that it has paid off handsomely. He has even found the time to complete his university education through distance learning.
Consultants, Advisors And Experts
Nicholas, now 27, formed Day Solutions as a private limited company in 2001 after he thought he had secured his first work contract. Unfortunately, that prospect fell through.
He admits that it was an uphill struggle at the beginning but he persevered.
“I was young and credibility was an issue,” he says. “Getting MNCs as clients and winning Government tenders was tough. But I got some senior consultants on my Board of Advisors and this helped. It feels so good to get new clients, go against the ‘big boys’ and win.”
Nicholas hired accountants, lawyers and a corporate secretarial firm from the start. They incorporated his company, filed his taxes and kept his company up-to-date.
With the experts on board, he could focus on getting his company in shape. He kept tight controls on the overheads by hiring freelancers at the start. Full-time employees were hired only when the company had a solid client base.
Foreign Talent
Today, some of the best men and women from his team are foreigners. Nicholas found getting employment passes for those who have graduated from local institutions straightforward. “Those we interviewed actually researched the procedures for hiring foreigners, so we learnt from them,” says Nicholas.
In a global economy, foreign talent “brings new skills and positive work attitudes” to Day Solutions. The Ministry of Manpower does not impose a quota on the number of P and Q1 Employment Passes as long as the requirements are met.
Cash And Finances
Another challenge Day Solutions faced was keeping track of business expenses. Nicholas turned to his accountant for help. Besides educating Nicholas on what purchases can be treated as business expenses, the accountant proposed a simple claim structure.
Big-ticket items had to be processed by the company while smaller items could be purchased by the employees. “It keeps us flexible. Employees are empowered to make purchases. But the bigger items have to go through the company – it gives us a chance to ask for better credit terms.”
Regional Business
In the past year, Day Solutions has started to feel the impact of outsourcing. Solution providers from other countries, such as India, are able to provide the same high-quality service, but at considerably lower costs. Nicholas considers how he responded to this threat as his greatest achievement to date.
“We had to grow by consolidating our local business and going regional. So, we merged with Alpsoft, a local IT partnership with offices in India,” he explains. “We now have 50 employees. I spend most of my time travelling, pitching for new business in China, Indonesia and Thailand.”
Future Plans
Nicholas and Alpsoft are considering creating a new company in Singapore. They are attracted by the Government’s recently announced tax exemption for new companies of up to S$100,000 of chargeable income per year for up to three years.
When asked about his view on Government programmes for entrepreneurs, he says “Grants and tax incentives are good, but businesses should not rely too much on them.”
Advice For Entrepreneurs
His parting advice to budding entrepreneurs: “You need to have good survival instincts.”
You can be sure Nicholas' survival instincts will steer his present and new ventures to success.
How Day Solutions Got Started
- Set up a private limited company and engaged professionals to handle his accounts and contracts right from the start.
- Invited senior consultants to be on the company’s Board of Advisors to give credibility to the company.
- Hired freelancers at the beginning to keep costs low. Full-time staff were hired only after a solid customer base was established.
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Practical Tips
- Go regional after you have consolidated your local operations.
- Tap into Government assistance but do not over-rely on it.
- Always keep track of your business expenses and set up simple claims procedures for everyone in the company.
- Foreign talent can add a new dimension to your workforce, but do not forget to ensure their work passes stay valid.
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