In Singapore, SMEs (Small & Medium Enterprises) contribute to half the country’s GDP and employ 56% of the nation’s workforce as a cornerstone of our economic success.
However, a quick comparison between 2011 and 2016 SBF-DP SME Index (The Index of SME Sentiment in Singapore) shows that optimism may have dipped by more than 10%, suggesting that these enterprises may now be facing some tricky problems.
A cyclical conundrum.
Singapore may be a little red dot on the map, but it’s also a country with the highest cost of living in the world.
With zero natural resources and limited land mass contributing to rising costs, SMEs are bearing the brunt of this increase as their profitability is eroded by carrying the burden of higher costs of operation, rental and people.
A growing shortage in manpower is also adding to their woes.
With fewer locals willing to accept low paying jobs and strict employment quotas for foreign hire, many if not all, smaller enterprises are experiencing a drop in productivity due to staffing issues.
Invariably this leads to even lower profit margins.
But is this vicious cycle, fuelled by weaker international market conditions signaling doomsday for SMEs in Singapore? Perhaps not.
Battling the odds.
There may be more challenging times ahead, but it isn’t the end of the road.
With a growing number of government-driven assistance and grants, technological solutions and alternative options available, SMEs can tap into lots of different ways to protect those precious profit margins.
SPRING Singapore Can Relief Cash Flow Difficulties
A local brand Singaporeans are all familiar with, but not many are aware of what they actually offer.
SPRING Singapore is a government agency that helps SMEs grow in a number of ways. These include:
- Capability Development Grants (CDG) – These grants can subsidise up to 70% of most operating costs including training, equipment costs, and consultancy.
- Loans to suit your needs – SMEs requiring more capital may subscribe for a SPRING-backed loan of up to $15 million, depending on their requirement.
- Investment Allowances – SMEs may receive up to 100% of this allowance when purchasing equipment.
They’re not weak. They’re wise.
The impression of older workers being less capable is an outdated principle in the modern world.
With retirement ages increasing and people working longer by staying healthier, the people with 20 years’ experience under their belt are the ones you should most consider hiring.
This is because research proves, time and again, that this sector are the most efficient and productive because they are smarter, more motivated and simply more independent when it comes to getting things done.
If this isn’t attractive enough, how about receiving up to 8% of an employee’s monthly wage by hiring an employee above 50 years of age, earning up to S$4,000 a month? This is possible through the Special Employment Credit (SEC).
Learning is winning.
Competition is real, and it only gets more intensive as globalisation and international trade agreements amongst countries flourish.
Which means that only businesses that can adapt to changes and constantly innovate will survive.
Innovation starts off with learning, and there are numerous sponsorships and training subsidies that SMEs can benefit, such as WDA and Skills Future Credits.
These schemes are designed to develop a structured approach to developing thinking, improvement and progress.
By creating the conditions that give people the time and opportunity to continually shape their businesses and take advantages of tomorrow’s opportunities.
Technology solutions can be affordable.
Technology is all about automating and streamlining processes as the keys to business sustainability.
Especially when they can help us get around manpower shortages and stringent employment quotas.
Yes, we all know effective new approaches don’t come cheap.
But with many subsidies and grants, they can be an affordable option.
So look for them and you may find yourself working harder, smarter and faster than you ever imagined.
Insuring your success.
It takes years of hard work to build, and seconds to destroy a successful business.
Hence, insuring your business and staff is another important element a SME should consider.
By protecting your business and its content from disasters, you are freeing yourself of potential financial liabilities. Similarly by insuring your staff’s health, you are ensuring the productivity and operations of the business.
With many economic and environmental changes present today, it is never too late to be prepared.
In conclusion, yes it’s tough and challenging as an SME in Singapore.
But with the right approach, it’s not impossible.
It just takes the wit and grit of an entrepreneur to make the business successful.
If time and effort are taken to source the right solutions, your business will flourish when they are combined with patience, perseverance and dedication.
After all, every multinational company started off as a SME at some point too!