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Should Singapore SMEs invest in business growth right now?

Dr Biz • Dec 09, 2020

With the many challenges facing Singapore’s SME sector as a result of the Covid-19 pandemic, a move to invest in business growth may not seem like the wisest decision right now. Unquestionably, in times of crisis it is important to prioritise core business activities that generate revenue, as well as supporting your staff and maintaining your premises. These should always be top of the list.

However, while these are the most essential priorities, a crisis is also an opportunity to explore new ways of doing things that could support your current core activities and lead to growth. To invest in business doesn’t always have to mean huge swathes of cash or entirely new systems, either. Rather, it can mean small injections of either time or capital or both that can be both cost effective and transformative.

Focus on efficiency

When any business owner decides to invest in business growth, the first area of focus should be business efficiency. Are there ways you can make the business run more smoothly, ideally with little to no new capital investment? As most Singapore business owners will be aware, in recent years the government has been pushing businesses across the city-state to invest in their digital capacity: from online retailing to digital supply chain management and internationalisation through global ecommerce platforms.

As we covered in a previous blog on digitalisation, there is a huge opportunity for businesses who embrace digital ways of working. According to DBS research, Singapore’s emerging digital economy has the potential to add over US $10 billion to Singapore’s GDP by 2021 and increase its growth rate by 0.6% per year. Around 60% of Singapore’s GDP is expected to be digitised by 2021, with growth in almost every industry driven by digitally enhanced offerings, operations and relationships.

Day-to-day management

Local SMEs are embracing this opportunity, with 2,700 food services and retail businesses in Singapore receiving a total of S$6.8 million in Digital Resilience Bonus (DRB) payments since August: an extension of Enterprise Singapore’s ‘Go Digital’ program to help support small businesses through the Covid period. Companies can receive up to $10,000 as part of the scheme and access the Productivity Solutions Grant for adopting pre-approved digital solutions in areas including e-commerce, logistics, human resources and e-payments - among many, many more.

When thinking about how a grant or an investment in digital solutions might benefit your business, start by identifying the tasks that cost you the most time, but generate little to no financial revenue. Typically, these will be administrative processes. Areas such as recruitment, human resources, payroll and accounting take up a huge amount of time that could be better spent on generating revenue for your business. This is why it is important to balance the cost of outsourcing with the time cost involved in taking a DIY approach.

Especially in areas like accounting, compliance and financial reporting, unless you have specialist training yourself, it is almost always most cost efficient to employ the services of a trusted and experienced professional services firm like Dr. Biz to help out. Additionally, numerous digital solutions have emerged that can make everything from payroll to invoicing and banking an easy, integrated digital process that cuts time spent on admin in half. Check out our blogs on accounting and payroll for more. The investment you make in this area is typically the most time saving, worthwhile one you will make.

Technology in the workplace

For SMEs in the food and beverage sector especially, supply chain and storage management is another great area to invest in business operations. In food management, for example, smart technology in kitchens and other storage areas that can log expiry dates and temperatures of stock combined with automated re-stocking processes can help business owners to improve safety and cut waste. Meanwhile, using tablets for self-service ordering at the till point, as well app-based pre ordering, can increase orders during busy periods.

Big technological advancements in warehousing are also helping business owners to drastically increase their stock turnover. These include automated storage and retrieval solutions that can move around warehouses automatically to keep inventory stocked and sorted, with stages sequenced to quickly restock shelves on the same day. Voice recognition technology is also helping to cut processing times significantly, particularly in the order packing sector where voice recognition is reportedly 40% faster than using handheld devices, while the number of mispacking errors were halved.

Choosing to invest in business growth during a time of economic upheaval is not an easy decision. While the potential benefits might be clear, implementing new systems and processes can be a time consuming and stressful experience and it’s easy to see why so many businesses shy away from it. However, if you can find a way to turn a challenge into an opportunity, you may find your small business reaping the rewards.

At Dr Biz, we provide tailored and comprehensive solutions for our client's business needs. From incorporation to accountancy, tax and payroll, to professional advisory services, we help businesses in Singapore assess potential risks and become more cost effective and efficient.

To find out more, please feel free to contact us.

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