Connect with us


One Singapore Entrepreneur Shows Us How He Built A Strong Personal Finance Plan While Growing His Business

Being an entrepreneur and growing your business doesn’t have to mean putting your personal finances and family’s financial plans at risk.

This article was written in collaboration with CPF Board. All views expressed in this article are the independent opinion of based on our research. is not liable for any financial losses that may arise from any transactions and readers are encouraged to do their own due diligence. You can view our full editorial policy here.

Entrepreneurship is full of risks. Often, even if one has  a good idea and work hard, the business may still not succeed. Losing your monthly paycheque and even dipping into your savings for seed capital to fund your business can be scary. If you invest too much of your savings into your business, it may potentially leave you and your family without a financial safety net.

To top it off, leaving the corporate world to start your own business may also set you back in terms of climbing the corporate ladder. Worse still, failure may attract questions over your capabilities.

Why Do Some People Still Do It?

Many people still embark on their entrepreneurship journey despite all the risks that are associated with starting a business. In fact, despite experiencing the worst economic downturn on record in 2020, the number of businesses in Singapore actually rose by close to 19,000.

Contrary to what many may believe, entrepreneurs are not necessarily people who enjoy taking risk. In fact, many entrepreneurs that I know don’t love risk, and any risks that they do take are always well-calculated.

Entrepreneurs themselves know (or at least ought to know) that the chances of business failure are high. Thus, they make sure they have things going for them and that the risks they do take are far outweighed by the potential returns they stand to gain.

To find out more about how it’s like starting a business and yet, take well-calculated risk that does not put our financial livelihood at stake, we spoke to Navin Sharma, who started Luxe Interior Design (pronounced lux-ee) in 2013, and how he is able to prioritise his personal and family’s financial stability, while growing his own business.

Source: Luxe Interior Design

Dinesh Dayani (Dinesh): Navin, thanks for speaking to us about your entrepreneurship journey. What made you want to leave your job to start Luxe Interior Design?

Navin Sharma (Navin): One of my earliest memories from my childhood was asking my father why some people were able to buy certain things. His answer was always “because they’re running their own business”.

Since then, I felt it was important to try to do my own business.

Dinesh: One common thing we’ve all heard about starting a business is how risky it is. I know you have a young family, with two daughters. How were you able to walk away from a good paying job to invest a chunk of your savings into your business?

Navin: It was always in the back of my mind that I would start my own business. I saved almost all of my salary while I was younger (and not married). Even at the beginning of my marriage, we were prudent with expenses.

Before starting the business, I made sure I had sufficient savings to last about two years without receiving a single cent from my business. My savings came in handy because there were unexpected expenses.

Before starting the business, I also asked my previous company if they wanted to invest in something new with me running it, but they were not keen. While it would have reduced some risk for me, I was prepared for that.

Many of my previous clients were already comfortable working with me, and with this pool of referrals, I was confident of starting up my business.

I didn’t want to cough up a huge initial investment. I started out small, putting in about $25,000 – and I didn’t have my own showroom at the time. I also didn’t want to have high overheads, so I used my car to showcase my work and my home as my workspace.

Image credit: Raymond Quek

Dinesh: Being an interior decorator, you don’t always have regular revenue.. How did you cope with the stress of dwindling savings, recurring monthly business expenses and continually having to secure new business? 

Navin: Business expenses grew in line with the number of jobs. Plus, to grow the business, I also needed to plan a marketing strategy and spend.

The stress is there, but if you do a good and honest job, existing clients will come back to work with you again, and they will refer others to you. I also grew my commercial jobs to 40% of our business, which included commercial spaces and restaurants, allowing more recurring client jobs, as compared to just taking up residential jobs.

Dinesh: To grow your business, you typically have to reinvest profits into the company. On the other hand, you also have personal expenses and need to take care of your growing family. How did you decide how much to take out and how much to put back into the business?

Navin: I always had the view that the company was “separate” from my personal life, and that it was bigger than me. These were the company finances, that I had to manage or reinvest for the company.

I see myself as an employee of the company and I drew a lower starting salary. If you have $5,000 each month, you will have to spend within it. The more you earn every month, the more you will spend. Drawing a lower initial salary kept my expenses lower.

Read Also: Core Inflation VS Lifestyle Inflation: What’s The Difference And How Do They Affect Your Retirement Plans?

I also paid CPF on my wages. Simply put – CPF is my “rescue fund”. We spend money all the time, but we should always set aside our CPF savings.

My CPF savings helped to pay for the down payment when I bought my own place. Otherwise, for a self-employed, it would have been tough to accumulate a decent amount without setting a sum aside over many years. Now, my CPF also pays for my home mortgage without me having to worry every month.

Dinesh: Having to contribute to your CPF must have taken cash flow away from your business, especially at the start? Did this slow down your growth or affect business in other ways?

Navin: It is the opposite. This freed me to focus on my business a lot more. I had peace of mind knowing that my home, medical and future retirement are being looked after. While these funds sit in our CPF accounts acting as a safety net, they are also growing at a good interest return of up to 5% (Special Account and MediSave Account) and 3.5% (Ordinary Account).

(Editor’s Note: Includes extra interest. Members who are below 55 years old are paid an extra interest of 1% p.a. on the first $60,000 of their combined balances (capped at $20,000 for OA).)

Even though I had less cash, I could focus more on my business because I had less stress about these things.

I also took a lower salary. This means the business wasn’t so affected.

Dinesh: 2020 was a difficult year for many businesses. The interior decoration business was badly affected with workers in the industry either stuck in Malaysia or in quarantine. How did you overcome 2020?

Navin: 2020 was very bad. In this hard time, many companies closed down. We paid staff even when they were not working. In fact, when we restarted work, there were many reinstatement projects.

When managing a small business, you may encounter occasions of higher earnings and lower earnings and this is to be expected. 2020 was bad and it’s definitely one of the lower-earning years.

Luckily, I’ve built a buffer all these years and that helped to pay for my business expenses in 2020. The buffer was wiped out due to COVID-19, but we have to keep a positive mindset.

Once again, my CPF helped to pay for my mortgage, so I didn’t have to worry about that.

Dinesh: How are you planning to grow your business in the longer-term?

Navin: The business is at a comfortable place today because of past years of hard work. It is a personal achievement and has also given me more control over my time. We can strive for more, but being in my 40s, I also want to be able to see my family more as I’ve missed spending time with them in the past.

Building a business is pressurising and it can consume you. I can work more to make the company even bigger. But part of my retirement plan is to be able to scale back the number of hours that I have to work.

I already have a retirement plan in place, and the additional source of income from CPF LIFE will allow me to enjoy my retirement years. CPF is also my “fall back” plan. With such a safety net, I feel I’m able to aggressively grow my business and take some investment risks.

Source: Luxe Interior Design

Managing Business Finances Is Quite Similar To Managing Personal Finances

Navin brings up the point of having a safety net for him to focus on the most pressing issues. For him, while earning a lower salary and contributing CPF takes some cashflow away from him and his business, it provides an invaluable safety net that allows him to concentrate on business-building.

Navin has also grown two layers of “safety net” for his monthly home loan payments: 1) remaining Ordinary Account balances in case he ever had to close shop; and 2) the ability of his business to continue paying him a salary and providing CPF contributions.

As a small business owner, Navin also realises that there are good and bad years. While 2020 did not go as planned for his business, he is able to survive to fight another day because he built strong financial safety nets during the good years. New business opportunities are now in reinstatement work and also a backlog of renovation works. His diversification to commercial projects will put him in good stead as many companies will need to renovate their offices to keep them suitable for employees to work safely.

Similarly, we need to diversify our finances when planning for our future. CPF provides a good safety net for our housing, healthcare and retirement needs, but there are also ways for you to further optimise your CPF savings.

Read Also: How To Continue Planning For Your Future Retirement (Safely) During The COVID-19 Recession

Beyond just CPF, there are other ways to diversify, such as having a personal emergency fund and retirement plans to supplement your CPF LIFE payouts in future.

Start now by using a simple planner at CPF’s Be Ready microsite to kickstart your retirement plan and maximise your CPF savings!