Singapore is known in the global business community as a hub for finance and home to many multinational corporations, that’ve chosen to set up their headquarters here and you would be surprised to know that 99% of the island’s economy actually thrives on local SMEs.
These small and medium enterprises form the core of the country’s economy and fiscal growth.
These SMEs became the core reason for the country’s survival during the immense business crunch brought on by the COVID-19 pandemic. These businesses are still the reason why the economy is still standing strong in a post-pandemic era when most economies are suffering from the aftershocks of the economic distress followed by a volatile market after the pandemic.
CPA Australia’s report shows that Singapore’s small businesses have been more resilient than their other Southeast Asian counterparts and a huge reason for that is the continuing support of the government towards this business sector during and after the pandemic.
Any local enterprise that has an annual turnover less than SGD 250 million or less than 200 employees is considered an SME. These SMEs strategized and pivoted throughout the pandemic for their survival, they relied on support from the government, friends and family to get through the unstable market.
Now that the pandemic is behind us, these SMEs must get back to normal operations and rebuild their business to be even more stable to battle a consistently unstable global economy.
What Are The Challenges Faced By SMEs in Singapore?
Despite Singapore’s congenial environment for business growth – SMEs still face quite a few challenges. Even if they survived the pandemic, they can have trouble scaling their business and operating it in a sustainable manner. Here are some key challenges these local enterprises are facing today:
Slow Shift Towards Digitisation
If the pandemic has taught businesses one thing – it’s that digitisation can be the difference between a business surviving during another such natural disaster. Many Singaporean small businesses are still relying on manual documentation and processes. They’re struggling to automate and adopt digital solutions to increase their efficiency. Singapore’s government is playing their part by giving these businesses a 70% subsidy on the software and resources necessary to support AI and cyber security needs through their latest SMEs Go Digital Program. They will also aid these businesses in providing the training necessary to digitise their operations.
There are markets that are increasingly getting saturated and naturally, it is hard for small businesses to combat competition with the already limited training and resources they have. One solution to this could be a regional expansion. However, that also requires a strategic vision and achievement of certain targets which requires time. SME owners often wear multiple hats and require help expanding into the regional market.
Capital and Funding Requirements
SME owners handle quite a lot on their own. Whether it is marketing, accounts or business development, they do it all on their own with little to no help in most cases. When it comes to acquiring funding for growth – it requires that these owners don’t have. Hence, they seldom have the capital needed for expansion or scaling.
Ironically, this is what keeps them trapped in a vicious cycle of always lacking the resources required to succeed. This is one area where more programs and avenues need to be established to help these SMEs have stable liquidity and a steady cash flow to run and expand their businesses.
Applauding and Supporting SMEs For Future Growth
Appreciation can boost anyone’s morale. SME owners and teams are no different. They thrive on being recognized for their efforts and achievement. They are what makes up the very core of Singapore’s economy and these local heroes deserve to be highlighted to keep them motivated to do even better. Established local businesses like Pan Pacific Leasing (Pan Pac) have started a much needed cycle of motivating these local businesses by enabling easy operations for them.
Pan Pac worked towards adding quick financing solutions and no fuss vehicle maintenance policies. This enabled these small businesses to save time spent on worrying about vehicles and deliveries and focus more on their operations and other valuable tasks.
This enables these SMEs to outsource functions without breaking their bank and finding more time internally to actually work on their growth. It is interesting to note that not long ago, the privilege of outsourcing was something only bigger businesses could afford.
In addition to catering their services to their SME clients, Pan Pac also champions the individuals who have helped Singapore tide over the difficult pandemic months. An example of one such client that benefited from their help s Tiffane of E-Beve LLP. E-Beve is a local seafood supplier relying heavily on delivery of her products to her customers. The pandemic made it necessary for her to deliver seafood at home. She quickly turned to an online sales model and she partnered with Pan Pac for the delivery execution. Pan Pac expedited the leasing processes and agreement and provided a vehicle E-Beve could use for delivery without a major disruption in their operations.
Wanpo Tea Shop SG is another brand Pan Pac helped during the pandemic by enabling deliveries for their products. The flexible leasing model enabled these businesses to stay afloat and operate during the challenging time of the pandemic and became the very thing that ensured their survival.
There is no doubt that SMEs in Singapore are faced with an uphill battle to innovate and adapt quickly. It is still amazing to witness that other local businesses and communities are ready to extend their hand to these businesses and make operations easier for them.
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