Small and Medium Enterprises in Singapore face many obstacles and struggles to achieve greatness. 99% of businesses in Singapore are actually SMEs which means that a sizeable portion of Singapore economy is dependent on the success of these business. According to a poll, our nation’s SME owners are some of the gloomiest in the world. It found that a whopping 79% of senior executives at SMEs here “have concerns about the global economy” as compared with a worldwide average of 65%. According to another article published by Enterprise Singapore, “almost 9 in 10 SMEs in Singapore say their immediate priorities of handling daily operations are more important than mapping out a long-term business strategy. Another piece of research article from the Association of Chartered Certified Accountants (ACCA) said that SMEs in Singapore would like more information and support on global trade opportunities to help them internationalize.
With such despairing news, is it all gloom for the startup scene in our beloved little red dot? Sky Tan, founder of Tranzaco.com shares his view,” It’s never easy to start a business. I should know, I’ve been there done that. The initial adrenaline rush soon runs out after getting hit with issues such as financing, customers, hiring and motivating staff etc.” This echoes the sentiment of some 30 over entrepreneurs we spoke with in the creation of this article. During the initial first year of a startup which might well determine the life and death of the business, the below highlights some of the common issues faced by this rare breed of risk-takers.
Cash flow will always be an issue during the first year of the company’s life. Customers will always be skeptical for a start and it takes time to win a steady base of customers. Funding is also an issue, especially for companies who are self-funded. Even with a good product, an initial pool of customers as well as months of revenue records, getting a loan from a bank seems to be one of the most difficult obstacle faced by a startup. Seed funding and grants are all good to sustain the business during the formation years, but startups find it hard to sustain without loans from the bank as business owners will need to convince banks that they are not a flight risk. On top of convincing the banks, they also face the issue of the “middleman” who are unscrupulous loan brokers who would skew and sway both parties just to get the loan approved and they get their fees. Soon this could be a thing of the past as Tranzaco.com launches their brand new platform to link business owners to agents directly. Now business owners can just log into the portal and key in their requests and get in touch directly with the bankers who will take the time to listen to their business propositions and advise the best way forward.
Hiring, Motivating and retaining staff
Good talent is hard to find these days, especially for SMEs where they face competition from large MNCs with deep pockets for the best talent. Given Singapore’s high cost of living and high costs of doing business, business owners need to compete with large MNCs for Singapore’s comparatively small talent pool of 5 million. Even if SMEs managed to get the candidates that they want, they face the continuous task of training their employees. Most SMEs run without a full-fledged training department and rely mostly on senior staff mentoring junior staff. SME owners may even have to give 1-on-1 coaching to new hires just to be sure that they are up to the task. Workers are also generally more demanding nowadays as compared to 20 years ago as personal development is one of the key things the modern worker is looking out for. Setting core values of the company and making sure that everyone in the company believes and lives according to these core values will go a long way in training. Setting clear goals and tying remuneration to these clear goals will help business owners in motivating staff and setting a well thought out career development path for new joiners would also give them something to work towards and help in retaining talent.
Starting a business means that you do not have the large amount of resources at your disposal unlike the MNCs. This would put a strain on what the business owner can do and as a business owner, you must prioritize your resources. Ensuring that resources are well spent and efficiently deployed will go a long way in ensuring longevity of your business. Reinvesting earnings in the early stages of the company formation will help build up the amount of resources you have at your disposal. Do your research and plan properly and do not overly commit so as to conserve your resources during the early years of your startup will help in this aspect as well.