Survival of the smartest and most resilient. This is where we are at in the current economic landscape as the impact of COVID-19 drives more business disruptions and slows down economies across the globe.
Singapore is already bracing itself for the worst recession in 55 years. Among the most vulnerable are the small and medium-sized enterprises (SMEs) that make up more than 99 percent of businesses in the country.
The Singapore Government, through its supplementary budget packages, introduced some support measures to help small businesses with their struggles. These rescue packages may serve as a temporary relief for SMEs.
However, with a recession looming ahead, SMEs need to do much more to get back on their feet and prepare for business recovery in the dawn of a post-COVID future.
SMEs may want to use this period to pivot towards a new mode of business that leverages their current products and expertise, but with a more recession-resilient model.
A supermarket operator may want to evaluate the pros and cons of getting into the bulk-discount food supplier game. A car dealer can step up focus on repairs and second-hand sales rather than pushing new cars. An interior design firm can explore opportunities in home staging by making homes or interiors spaces look their best in a challenging market.
Technology has removed most barriers to communication and accessibility, creating a wealth of opportunities – not just in Singapore, but also around the region if we are prepared to think bigger.
Local organisations should start taking a regional perspective towards growing their businesses to expand their customer pool. However, this would first require them to break out of their comfort zones to search for these cross-border opportunities.
SMEs may also want to explore opportunities to run “virtual” businesses, or a business with much of its operations or transactions done online. Online businesses require less cost to set up and operate especially when leveraging new cost-effective technology such as cloud computing.
Digitalisation and changing lifestyle habits have also been driving healthy e-commerce growth across the world. E-commerce experts believe that with the current global city lockdowns, e-commerce growth will continue to accelerate as consumers who were previously apprehensive about online shopping will have to get accustomed to it to adapt to today’s new norm.
Case in point: the recent lockdowns have pushed more people to buy online. Major supermarkets in Singapore like NTUC Fairprice and Lazada’s fully online store, RedMart, saw online orders reach unprecedented levels, even more than their busiest months in 2019.
Orders on RedMart exceeded its weekly average by 300 percent. As such, this is a trend that SMEs would need to embrace in order to ensure the continued survival of their business.
SMEs that were not technology-ready before the lockdown were caught out when they had to shift to remote working arrangements in a matter of days once their country lockdowns began.
Businesses of any size, including SMEs, need to plan for business continuity and resilience. As businesses learn from the current challenges, it is necessary to tap on technology to strengthen the organisation against future disruptions and risks. Simplified technology tools targeted at SMEs exist to help businesses accelerate their foray and continued journey into digital transformation.
As early as 2018, the Infocomm Media Development Authority (IMDA) introduced GoCloud to help SMEs move to cloud-based applications.
The initiative provides consultancy and training to equip SMEs with digital capabilities. Grants are also available, such as the Productivity Solutions Grant, which provides up to 70 percent in funding for companies adopting IT solutions to enhance their business processes.
SMEs should also look for technology offerings to drive increased productivity of their staff, starting by eliminating time-wasting administrative manual work, especially in human resources and finance.
Tools that enable real-time insights into business finances and inventory capabilities will also allow management to make better business decisions, adding another step towards organisational resilience.
In Singapore, much of the Government’s rescue efforts have been designed to save jobs, encouraging SMEs to explore all options before resorting to retrenching or furloughing staff.
In the short term, business leaders will need to review their operations and actively explore how employees can provide more value. They may need to look into reallocating staff to support more demanding areas of the business, such as delivery or customer service.
One interesting example seen recently was when more than 1,000 ComfortDelGro taxi drivers were being onboarded and trained to support Redmart delivery services to meet the demand in online grocery orders.
Visionary leaders will also be thinking of creative ways to prepare their employees for a post-COVID-19 future where the workplace or even entire industries may be transformed.
IDC found that activities related to evaluating information performed by technology will grow by 28 percent in just two years, and 18 percent of activities related to reasoning and decision making will be performed by machines.
This may be a blessing in disguise as it provides businesses and employees the much-needed impetus to rethink roles and shift towards skills that will be much more valued in the digital economy. Employers should take advantage of public initiatives and resources that are widely available, such as SkillsFuture, and encourage conversations with their employees on possible training courses to help them stay relevant.
SME leaders are driven and motivated individuals, and many will come out of this period with an even stronger resolve to build their businesses. Challenging business environments often present hidden opportunities. They allow business leaders to develop good habits, putting their operations in stronger positions to grow when the economy recovers.
Take up the challenge and become one of the many SMEs that will emerge from these tough times stronger than ever.
This article originally appeared in the Entrepreneur's Digest print edition #92 and has been edited for clarity, brevity and for the relevance of this website.
About the Author
Arlene Wherrett | Vice President & Managing Director | Sage Asia
In her role at Sage Asia, Arlene Wherrett is responsible for accelerating the growth of Sage’s business in the region. Working closely with Sage’s loyal business partners, Arlene builds on the successful business established in Asia over the last two decades. Arlene has over 20 years of experience in managing businesses within the IT and Services industries across Asia Pacific. She is also a certified Gallup Strengths coach and has led leadership development workshops for numerous organisations.