SMEs in Singapore need a lot of help. And it is not just because of the impact brought by the COVID-19 virus.
There are well over 220,000 SMEs in Singapore employing 2/3 of our workforce and contributing 50% to our GDP. These are no small figures. In other words, our SMEs contribute significantly to the well-being of our economy and their success (or failure) will have a serious impact on our people.
The impact of the COVID-19 virus to many businesses has been well documented. Many companies are affected by the massive dip in income and too many jobs are lost. Virus or no virus, SMEs in Singapore need help, and a lot of help is needed! I spent a large part of my working life in SMEs. I have witnessed and went through many of the problems faced by SMEs. Some SMEs climbed out of it, and some didn't.
SMEs are not all doom and gloom. The SME business has several advantages over the more established and bigger ones. Flexible, nimble, 'family-ness', able to make decisions faster, customers feel closer to them, these are just some examples. I have worked with many fantastic SME owners and leaders. Many of them displayed the attributes that pulled them through during hard times - fighting spirit, genuine care for employees, visionary. There is much to learn from these entrepreneurs and I am indebted to many of them for the insights shared with me and for honing the skills that I possessed today.
Back to the topic of this article. Why do SMEs in Singapore need so much help? Let me list them.
1. Help Needed in People Issues
There is a saying 'Company culture can make (or break) an organization'. At the top of the list of people issues is the company culture which is primarily shaped up by its people. I feel this is the number one issue that breaks many SMEs. As a result of a negative culture, we see good people leaving, there is a stubbornness or inability to change, there is an avoidance and blindness to reality (and numbers), and many more. A poor culture will lead to many disasters waiting to happen. SMEs need help to change their culture. First of all the leaders must acknowledge there must be a culture change in order for the company to transform. They may need to accept external help if internally they can't do it themselves. Only if the leaders accept this need to change, then steps can be taken progressively to implement the change. They must believe and communicate before their downline gets the buy-in.
“The behavior of a business’s leaders is, ultimately, the behavior of the organization. As such, it’s the foundation of the culture.”
The quote above by Larry Bossidy, author of the book 'Execution: The Discipline of Getting Things Done' summarized it nicely. A company culture is set by their leaders. While I have worked with many awesome leaders, there were some that might not make the cut. Somehow, there is always an inherent link to 'family business'. Many of these leaders inherited the business and are 'installed' in key positions in the company. Many of these leaders are not exposed to the outside world of good business and people management. If they don't know what they don't know, how can we make them see the benefits of an alternative solution? How many of them can readily acknowledge their shortcomings and accept help? If you want to change, start at the very top.
Next is the staff in the company. Today, Millennials aim to join the more 'glam' companies like Facebook, Google, or a fancy tech or fashion startup. Many of them shun away from the traditional SMEs. This resulted in many of these SMEs continued to be staffed by seniors and long time employees. The lack of outside exposure, poor leadership, and fresh talents exacerbate the problem further. SMEs need help to relook their branding and youth engagement strategy, not only in terms of staffing but also how their offerings can reach out to the younger customers.
2. Help Needed in Financial Capability
What I meant here is the ability of SME to read their financial statements and make sense of it. Whenever I joined a company, one of the first priorities is to look at the financial reports. Is the company profitable? How is the cash flow? Is it setting the right price? What is the incentive system? What cost can be optimized? Though I must admit I hate financial numbers, the years of experience had made me compelled to read these financial reports. I don't pretend to be an expert, and sometimes I do seek help from finance people such as the finance manager (if the company has a good and experienced one). This is the next issue. How many good and experienced finance people want to join or stay in an SME? Can the SME even afford a good one? And so far, I haven't even touched on the financial viability of the SME yet...
3. Help Needed in the Business Planning Process
Many SMEs started as a small setup run by one or two entrepreneurs. In the early days, they make all the decisions and execute the plan, often based on their gut-feel. Success depends on the astuteness of these leaders. This is fine when the company is small and at its initial stage. But as it grows, more people join, and more departments are formed. In my years of experience, I find many SMEs have a weakness in developing a cohesive winning strategy, or coming up with a plan and executing (or orchestrating) it. The basic planning process is lackluster. The ability to put things together, strategize and communicate the plan is weak. If you don't plan, you plan to fail. SMEs need help to do this.
4. Help Needed in Understanding their Customers
I love to do this. Frequently, I will take the chance to ask a leader or a staff in the SME 'So who are your customers?'. What I usually get is some broad description which clearly indicates they don't really know. All they know is to just sell, and hope for the best. Knowing your customer is paramount. After all, they are the ones who pay right? SMEs need to know beyond the basics such as gender, age, addresses, birthday, etc. They need to know the customers' lifestyles, how they do research and buy, what's their behavior etc? The key is to know their customer journey. SMEs need a lot of help in this. There are several concepts that I like to use such as the McKinsey consumer decision journey or Google's See, Think, Do, Care framework.
5. Help Needed in going Digital
What this means is the ability of SMEs to adopt and harness technology (including online and mobile tech) to their advantage. Technology can help to improve their productivity, make them more efficient, and boost their ways to connect with customers. Technology doesn't need to be elaborate or expensive. SMEs just need to know where and how to find help. The government has a 'Go Digital' program to support local SMEs in their list of government support. This can be the first place to seek help.
6. Help Needed in Seeking Government Assistance
We Singaporean love to complain, especially about the government. But do you know that the level of support rendered by the Singapore government to our SMEs is one of the best in the world? I have come across many overseas partners praising the Singapore government on their level of support to local enterprises. You can check out the comprehensive sections dedicated to financial and non-financial assistance to SMEs on the Enterprise Singapore webpage. Many SMEs are unaware of such support. Or perhaps they are aware but not sure on how to go about applying for these supports. I must say for the first-timer, it may look daunting. Kudos to Enterprise Singapore for streamlining and making the process so much simpler compared to many years ago. On a final note, I must say these support don't come free. You need to do some work before, during, and after the handout. There is a need to write a decent business plan, and they are other documents and justification to fill. Not to mention the dreaded Return on Investment (ROI) to be submitted after completing the project. Nevertheless these are still good support. It will be a waste if SMEs ignore them.
What's Next for SME who needs Help?
The above are the key areas that Singapore SMEs need help in. There may be others but I am providing the key ones. If you are an SME, you may resonate with some or all of them. Accepting these challenges is the first step. Next is to diagnose them, understand the issue, and develop solutions to solve them. The good news is that you don't have to be solving them alone. There are many help available.
This is the reason why HelpMeSME.sg was started. I enjoyed working in SMEs and I am passionate to help many SMEs succeed. I hope this site may eventually become a platform for SMEs to seek help and many others like me coming forward to help them. Together, we can make SMEs compete against the big boys and provide an attractive option for people to work and succeed.
I will be sharing more of my thoughts and experiences in the upcoming articles. I hope these can spark off some ideas and help you in your SME entrepreneurial journey.
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!