The digital economy presents us with problems and opportunities. Small companies now have an unprecedented reach with their customer base. This shift in business operations is transforming industries and offering new ways to overcome constraints that were previously untenable.
The downside to this, is that the restructuring of internal and external affairs means a difficult time for businesses. As this shift is relatively new, many are wary of which paths and decisions to take.
In their Position Paper For A Vibrant Singapore, the Singapore Business Federation warns that these times may prove challenging to local businesses. According to their research, 46 percent of SMEs are classified as “high risk” entities in regard to their credit ratings.
So the question arises, how do SMEs ensure a smooth journey through this difficult period? Following the paper’s recommendation, these are 4 tips you can take to navigate your company’s growth.
1. Expand Your Geographical Boundaries
Indigenous companies are being encouraged to partake in the global arena, while ensuring that base operations are maintained to grow alongside foreign MNCs. Remaining in the local market limits the ability to expand. Look for growth opportunities that allow you to take your business to international markets.
In 2010, the government set a target to produce over 1000 globally competitive companies, with revenues exceeding $100mil by 2020. Today, only a mere 300 of that intention have succeeded.
2. Utilize current technology to gain international exposure
The technology spread has made many devices and programs available to industries that would not be able to afford them 10 years ago. With a lower entry barrier, small businesses are being given the opportunity to compete with the big fish in the pond.
Startups should not underestimate their ability to reach an international market, and consequently, be prepared when they do succeed. This is not just limited to companies, but even sole proprietors. With small and smart investments, you will be able to take a step into the global arena.
The nature of the internet has made globalization a very practical target for businesses. As long as your business is primed and logistics are certain, don’t be afraid to take a step forward in this direction.
3. Hire the right talents and invest in people
Going global solo is possible, but having the right people by your side helps facilitate mobility. It’s a cliché, but no man is an island.
Take the time to review your organisational structure and incentives to attract the best possible talents. Keep in mind prospective talents that you can nurture and invest in to grow alongside you.
Investing in training programs will help keep your staff motivated and loyal to your cause. You will want them to be prepared for handling larger duties as your business grows.
4. Take Advantage of Grants and Opportunities [restrict]
The Singapore government offers attractive grants and opportunities for SMEs looking to expand and grow. There are currently multiple enhancements and funds provided by the Singaporean government that you can take advantage of immediately. Below are a few, as of 2018:
Enterprise Development Grant (EDG) Effective from 4Q 2018.
- One grant for companies to upgrade capabilities, innovate and internationalise
- Streamline of Enterprise Singapore’s Global Company Partnership (GCP) Grant and Capability Development Grant (CDG) into one
- Supports Singapore companies in market and business development, innovation and productivity and core function and capability
- Funds up to 70% for qualifying activities from SMEs and up to 50% for non-SMEs
In the interim, companies can continue to apply for the GCP Grant and CDG through the Business Grants Portal.
Productivity Solutions Grants Effective from 1 April 2018
- One grant for companies to access a wider range of productivity solutions for business upgrading
- Streamlines existing productivity schemes – the Innovation & Capability Voucher (ICV) by Enterprise Singapore, Landscape Productivity Grant (LPG) by National Parks Board, and the SME Go Digital Programme by Info-Communications Media Development Authority
- Funds up to 70% for qualifying activities
Companies can apply for the grant through the Business Grants Portal.
Double Tax Deduction for Internationalisation (DTDi) Effective from Year of Assessment 2019
- Expenditure cap for the Automatic DTDi will be raised from S$100,000 to S$150,000
- Singapore companies can continue to apply to Enterprise Singapore or Singapore Tourism Board (STB) on qualifying expenses in excess of S$150,000, or on expenses incurred on other DTDi qualifying activities
Others you may want to look at include:
Click on the links to read more.
Difficult times lie ahead, but Singaporean SMEs can grow despite the market volatility. By taking a proactive approach, SME growth is a very real prospect that can be achieved in the long-run.
The recommendations from Singapore Business Federation include:
- Shifting growth targets from a domestic to global horizon, while maintaining a strong local base
- Utilizing current technology to pursue international markets
- Grooming and sourcing for staff that fit your company’s ideals
- Taking advantage of grants and opportunities provided by the Singaporean government to leverage growth and finances in operations
We can safely assume that the government looks forward to working closely with trade associations, chambers and unions. This means a diverse enterprise eco-system, a thriving SME community and a strong economy overall.
While the transitional period may be tough, there are avenues and solutions that the local government provides so that SMEs can continue expanding. Stay on top of the news to provide your business with an intellectual edge and vision.