Post COVID-19, What can SMEs Do Now to Recover Faster (than the Rest)?
Updated: May 27, 2020
[Update: DPM Heng announced the supplementary budget, called the 'Fortitude Budget on the 26 May 2020. This article had been updated with the key measures.]
I like to share two wonderful quotes from our ministers.
“Don’t just just look at the present 不要只是看眼前Don’t just look at the here and now.Take this chance to ask ourselves. When the recovery finally comes, whether it is six months, nine months, how do we position your business, our economy to go out faster than the rest of the people?”
This was from Trade and Industry Minister Chan Chun Sing during a dialogue with businessmen from the Singapore Chinese Chamber of Commerce and Industry (SCCCI) on 10 February 2020. Some of you might have caught a supposed secretly recorded speech by Minister Chan during that session. It was hilarious but certainly you can understand and appreciate the steps taken by the government given the situation then.
“Given the current COVID-19 pandemic, companies should use this period to digitalize, restructure and transform.”
This was from DPM Heng Swee Kiat & Minister for Finance Supplementary budget speech on government’s additional support measures for businesses and households in response to the COVID-19 pandemic on the 26 March 2020.
These two quotes from our leaders during the early days of the Circuit Breaker (CB) period triggered many thoughts in my mind.
Do I face each day as it comes and let each day goes by? Or do I do something now, so that I will have a better head start than the others when the recovery comes?
I chose the latter. I believed there will definitely be a recovery. It is a matter of when.
If I am an SME leader, what can I do so that my company will recover faster than my competitors when the recovery comes? What can I do so that my people can emotionally and financially recover faster than the others?
In this post, I will be sharing my thoughts and a few stuff I did. This article aims to provide the SME leader some ideas on what to do during this CB period. It is organized to start off with things you need to do immediately to stabilize your business, followed by areas that you can do to poise your business and yourself for a faster recovery.
1. Tap on Government Support
This is a trying time for all businesses. DPM and Minister for Finance Heng Swee Keat unveiled the Unity, Resilience, Solidarity and Fortitude Budget on the 18 February, 26 March, 6 April and 26 May respectively. If you haven't applied for any of the support measures, this should be the first thing to do. Some of them such as the Job Support Scheme (JSS) are automatically paid out in the months of April, May, July and October of 2020. There are many more others and I have provided a summary of useful information and links here:
A. A comprehensive list of support in point form from the first three Budget announcements by Enterprise Singapore. This document also provides very good examples of how various types of businesses can benefit from the budget. Two are shown below. You can read more here.
B. A detailed list of support, though not updated with the latest Solidarity supplementary budget. Nevertheless, it explains each of the measures in greater detail. You can read more here. Another one page summary by Business Times can be found here.
C. If you want a summary of the timeline when your company will receive the various waivers and cash payouts from Budget 2020, click here for a downloadable version. Good for your cash flow planning purpose.
D. The Job Support Scheme (JSS) is a cash grant. If your company qualifies, your company should automatically be under JSS if you had made CPF contributions for your local employees. The payout tiers in the different month can get pretty confusing. You can read more here.
E. If you hire foreign workers, you will enjoy waiver and rebate for the Foreign Worker Levy. For the unaware or confused, MOM has a good FAQ page. For those who want to know the exact payable rates for your sector, you can read more here (under Section III-2).
F. Rental and property-related costs typically form the next highest business cost after labour. Companies will receive a 30%-100% property tax rebate. You can read more and other tax relief measures here. SMEs will also enjoy a cash grant support, disbursed through the property owners. You can read more here.
G. You may want to explore taking up loans to help in your cash flow needs. There are a couple of schemes available at reasonable repayment terms. You can read more here. If you are confused about the difference between the two main schemes Enterprise Financing Scheme (EFS) and the Temporary Bridging Loan Programme (TBLP), you can read more from this FAQ here.
2. Review your Business
When was the last time you actually did an overall review of your business? "Well, where do I start?" It may seem like a load of things to think about and you may be lost. I like to offer a simple framework to help you think about the business in a systematic manner. The framework is adapted from Ram Charan and Larry Bossidy, the authors of the book 'Execution: The Discipline of Getting Things Done'. It talks about the 3 core and interlinked aspects of getting things done in a business. They are strategy, operations and people.
“The leader must be in charge of getting things done by running the three core processes—picking other leaders, setting the strategic direction, and conducting operations.” Ram Charan.
While we are not merely focusing on execution here, the framework has guided me to systematically think about the various aspects of my business and what I needed to do for each aspect. It is like a mind map. You can see the use of the framework in the picture below. This whiteboard is right behind my desk. I see it every day when I enter my office. It helps to keep me focused on what I need to do for my business.
3. Explore New Business Opportunities
“Stronger, faster companies can detect and pounce on opportunities, for instance, to take advantage of the downturn by snapping up assets at bargain prices and snatching market share out from under their competitors.” Ram Charan.
I am constantly looking out for new business opportunities because I am excited about creating a new value in the marketplace. Is there an opportunity to disrupt the market with a new business model, or perhaps fulfilling an unmet need? How about any horizontal and vertical integration that will strengthen your value proposition in the market?
“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful.” Warren Buffett.
Given the current condition, there may be no better time to invest in a new opportunity than now.
4. Develop Capabilities (Including your own!)
If you want to run faster than the rest, you better start training now for the race day! There is no better time to hone and develop better capabilities for your company, your people and yourself.
For companies, do leverage on government grants to develop new capabilities such as implementing new IT systems, or develop new processes to make your business more productive and efficient. There is a program for companies to adopt readily adoptable solution via the Productivity Solution Grant (PSG). More information here. For larger investment or projects, you can explore the Enterprise Development Grant (EDG). You can find out more here. I have several good experiences and outcomes leveraging on this grant. Do note that many of these grants are based on a reimbursement model, which is you pay now and get the subsidies later. Though, there is a small cash advancement to help defray the initial cost. I will be writing more about this in the coming blogs.
“The hardware of a computer is useless without the right software. Similarly, in an organization the hardware (strategy and structure) is inert without the software (beliefs and behaviors).” Larry Bossidy.
Do not forget to invest in your staff capabilities for they are the heart of your organization. You might have heard of SkillsFuture. They are applicable to your employees as well as yourself. Do check out the SkillsFuture Enterprise Credit (SFEC). Eligible employers will receive a one-off S$10,000 credit to cover up to 90% of out-of-pocket expenses on qualifying costs for supportable initiatives, over and above the support levels of existing schemes. Do read this FAQ to find out more information. And while your employees are sent for courses, do leverage on the Enhanced Training Support Package (ETSP) which will provide up to 90% of the employee's hourly basic salary, capped at $10 per hour. However this is only applicable if you send your employees to a few eligible training providers under each sector. Read more here.
At this point, I like to make an appeal to all business owners to consider hiring mid-career workers. These are individuals who may have lost their job during the COVID-19 period and are facing difficulties securing a new one. Many of them are good individuals who are mature in their thoughts and possessed valuable skills. They are good mentors to guide the younger employees. There are support to hire them through the Career Support Programme (CSP) where companies can receive up to $42,000 salary support for up to 18 months. You can read more about CSP here. Another program you may look into is the Professional Conversion Programme (PCP) where companies can receive up to 90% funding for the employees' salary, capped at $6000 per month for the duration of their conversion program.
I have talked about companies and your employees. What about yourself? I would highly recommend taking up online courses to upgrade your knowledge. Many of these courses are free. You don't need to spend many hours on these courses. Many of them are short videos online (up to 10mins), followed by a simple quiz. If you are taking up online courses, I would recommend one that comes with a certificate upon completion. Why is certification important? First, it brings credibility to the course. Second, when you achieve the certificate, do share it online via your Linkedin profile for example. When it is publicly available, you are more likely to make sure you retain and practice that knowledge and not forget about it!
There are several site that provides online courses. Some are paid and some are free. Find a topic that will value-add to your work. Useful and popular topics these days are digital marketing and data analytics. When choosing your course, do look out for ease of learning such as an intuitive learning interface. I do recommend the following:
Coursera (Courses can be viewed for free. They called it 'audit'. You may have to pay if you want and download an official certificate).
Future Learn (There are some courses with free digital upgrade e.g. by Accenture, where you can get and download an achievement certificate upon completion of a course).
Google Digital Garage (I highly recommend the course 'The Fundamental of Digital Marketing'. It is totally free and you earn a certificate from Google after completing the course and passing the final exam).
5. Seize Good Deals
Giving the current downturn, many businesses out there are offering their products and services at a steal. You can sniff out good deals if you do some research. For example, if you ever want to build digital capabilities to enable more sales, you may want to reach out to some marketing agencies that may offer their services at a good price. I bought this domain at a discount during the Circuit Breaker period. Tip: Leverage on government support to make the deal even sweeter!
Working from home and your employees need laptops? Do you know there is a grant specifically to help you acquire up to 3 laptops as well as the relevant software with up to 80% subsidy from the Productivity Solutions Grant (PSG)? The packages are available from Singtel and M1. You can read more here.
Wow. I started out doing this post to give some ideas to SME business owners on what to do during this Circuit Breaker period. While I was researching, I realized there is really A LOT of different support and grants available. I hope I have provided information to a few key ones. Ultimately, the aim of all these supports and grants are the same: Help business survive, retain your good staff, and help you to recover faster when the time comes!
If you have any feedback or more useful stuff to include here, do let me know!
If you are an SME, and if there is any area you may want some help, or an opinion, or just simply a chat, do drop me a message!
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