Small & Medium Enterprises (SMEs) have proliferated in Singapore in the last one decade. They are the backbone of Singapore’s economy, contributing over 50% to Singapore’s GDP and providing employment to over 70% of the local workforce. There are over 3,00,000 SMEs in Singapore, and more than 80% are locally owned.
According to Singapore’s Ministry of Trade & Industry, an SME is defined as a corporation with an annual sales turnover of less than S$100 million and has less than 200 workers employed.
SMEs provide massive support to Singapore’s economic advancement by enhancing innovation, bringing new technologies to local markets, keeping the local markets engaged with new trends, and more.
Despite all this success, an enormous contribution to GDP, and astonishing numbers, there are several challenges faced by SMEs in Singapore, which we will discuss in this blog.
Challenges Faced by SMEs in Singapore
Some primary business challenges SMEs face in Singapore are concerns about the competitive business landscape, rising operation costs, limited resources, competition from large-scale businesses, and hiring & retaining talents. Let us walk you through them.
Rising Operation Costs
Managing the rising operation costs is a critical business challenge that SMEs face in Singapore, and it has worsened due to covid-19 pandemic. In 2022, many SMEs had insufficient cash flow in Singapore. With rising inflation, materials & utilities costs increasing, and recession possibility on cards, SMEs find it arduous to manage cash balance.
We recommend cutting down expenses wherever possible and outsourcing salient business tasks such as HR & Payroll Services, Accounts & Bookkeeping Services, and Financial Audit Services. It will help you alleviate the need to manage required resources, software, and tools for them and regularly update them.
Competition from Large-Scale Companies
SMEs have pressure to constantly innovate, upgrade, and offer unique products & services to their customers to stay ahead in this competitive market and growing competition from large-scale companies.
With large-scale companies continuously investing in enhancing their customers’ overall experience with their products & services, it is challenging for SMEs to stay ahead with fierce competition.
SMEs can focus on niche markets to capture that segment to cope with growing competition from large-size companies.
We recommend outsourcing salient back-end business tasks to Bestar Services and investing the saved time, cost & resources in your core business activities.
Raising Funds
Another business challenge SMEs face in Singapore is raising funds to grow their business in fierce competition. The best way to overcome this challenge is to hire a professional business advisory consultant who will guide you with potential funding sources and help you select the best one for your business.
Business Advisory Consultancy will also guide you with various government incentives that you can cash on to foster your business’s long-term ROI and sustainable growth.
At Bestar Services, we provide comprehensive business advisory services in Singapore. Our highly qualified & proficient business advisory consultants will guide you on potential funding sources & various government incentives for your SME.
You can refer to our other blog on how to raise funding for your business in Singapore for reference to raise funding.
Limited Resources & Workforce
Limited resources, skilled & talented workforce, upgrading them, and retaining them is another critical business challenge SMEs face.
It is pivotal for any SME to constantly upgrade their resources, including training & development of the workforce, updating software & tools, and upgrading their infrastructure to cope with the changing business environments & fierce competition.
We recommend outsourcing your salient business tasks to us, such as HR & Payroll Services, Accounts & Bookkeeping Services, and Financial Audit Services and utilize the saved time, cost, and resources on core business activities. We will handle your salient back-end business tasks and give timely reports for the outsourced work.
Key Business Opportunities for SMEs in Singapore
Apart from the above business challenges SMEs face in Singapore, let us walk you through key business opportunities for SMEs in Singapore.
Taking business digital
Post-pandemic in 2020, businesses have shifted to digital platforms, and customers primarily prefer online platforms for shopping rather than offline due to the ease of convenience & luxury of comfort.
With accelerated digitalisation and consumers preferring online stores, we recommend taking your business digitally and enhancing their cash reserves by earning revenues from E-Commerce platforms.
Refer to our other blog on how to start an online business in Singapore in 7 easy steps for your reference.
Green Initiatives
With the world moving towards sustainability, businesses should adopt this approach and Go Green. It is pivotal to adopt a sustainable path for long-term growth & success for your business.
SMEs in Singapore can become part of the green transition in Singapore by utilizing resources allocated to R&D for urban solutions & sustainability. SMEs can even take advantage of various financial aid schemes such as National Environment Agency’s (NEA) Energy Efficiency Fund (EEF) and Green & Sustainability-linked Loan Grant Scheme (GSLS).
Conclusion
After reading the blog, you will have a comprehensive understanding of business challenges faced by SMEs in Singapore, tips to overcome them, and key business opportunities for SMEs in Singapore. However, if you need more guidance and business advisory consultation, feel free to contact us.
At Bestar Services, we provide comprehensive business services related to HR & Payroll, Accounting & Bookkeeping, Financial Audit & Assurance, Company Incorporation, Business Advisory, Tax Advisory & Compliance, and more.
We aim to reduce your business tasks by taking off the load of salient business services. Outsource your business tasks to us, and invest the efforts, resources, time, and cost to grow your business. For any questions regarding our outsourcing services for SMEs and quotation, contact us at +65 62994730 or email at admin@bestar.asia.
Refer to our other blog on Popular Business Side Ideas for Side Hustlers for 2023 in Singapore for your reference.
