Building Resilience In A Challenging Landscape

SMEs must prepare themselves for multiple threats in the coming year even as they look forward to support from Budget 2019.

building resilience

Author: Joyce Tee, Managing Director and Group Head, DBS SME Banking

With the annual Budget approaching, many businesses and industry associations will be drawing up their usual wish lists of what assistance they hope to get from the Government. With multiple risks on the horizon, much thought will be put into these lists.

The US-China trade spat is one key threat that will continue to loom large over the local business community in 2019. A poll conducted at the EY Asia-Pacific Tax Symposium late last year showed that over half of Singapore-based businesses surveyed have felt moderate to significant impact from recent US trade actions. These respondents also believed that such actions will most likely continue over the next six months to two years. This is echoed by the Singapore Business Federation’s recently released National Business Survey where one of the top concerns among local business, was the ongoing US-China trade tensions. This is in addition to the rising interest rates; all of which add on to SMEs’ woes of perennial domestic problems of labour shortage and rising operational costs.

Against this backdrop, many businesses will be looking to this year’s Budget to get the support they need to help them overcome these challenges. This could involve the extension of some grants that are expiring, or the tweaking of others to make it easier for business owners to access and benefit from.

Support can also be given to SMEs looking to ramp up their presence in the region. While the trade spat between the world’s two largest economies is clearly a threat to an export-dependent country like Singapore, it also presents an opportunity for local SMEs to support multinational corporations who have turned their attention to ASEAN amid the disruption in trade flows. With our established network in core markets across Asia, DBS is well positioned to help SMEs capitalise on opportunities presented by MNCs who relocate their operations in the region, given how connectivity is deeply embedded in our business model.

While we can cross our fingers that such support is forthcoming from the Finance Minister on February 18, many of these issues are beyond the control of companies here. What SMEs need to focus on instead is ways that they can improve their businesses and to build up their resiliency.

For a start, SMEs must get their fundamentals right by understanding their customers’ needs, and how to make their business more relevant to them. In doing so, they will be able to generate greater demand for their products and services. DBS helps our SME customers do this by providing curated content such as Disrupt Guides and Trend Reports, as well as through the courses at our SME Academy, which provide foundational knowledge on how businesses can improve day to day operations to stay competitive.

As digital disruption is here to stay and will continue to impact numerous industries, it is also crucial for SMEs to build their online shopfront and develop their digital marketing strategies. DBS is one of the co-founders of 99%SME, a digital marketplace that makes it easier for SMEs to market their products and services online and grow their customer base. Through DBS SME Connect, we are also a strong supporter of the Start Digital initiative by Enterprise Singapore and Info-Communications Media Development Authority, which offers SMEs solutions to help digitalise their day-to-day operations and enhance the effectiveness of their operations. Our customer-first approach have always guided us in enabling such solutions for SMEs – from instant business account openings to merchant collection system DBS MAX, we want to enable choices for SMEs that make banking seamless and simple.

Lastly, it’s important for business owners not to leverage themselves to the hilt, especially with interest rates on the rise. While some agile SMEs may be looking to capitalise on opportunities, I would caution against borrowing to speculate on stocks or other investments. This is particularly important as cashflow is the lifeblood of any business. As such, we remain focused on offering a range of working capital and financing solutions to help SMEs enhance their cashflow management.

Regardless what this year’s Budget will bring, I believe business owners should leverage their own entrepreneurial skills and resiliency, to overcome the challenges ahead. SMEs are in the best position to stay nimble; I have witnessed business owners who continue to provide value to their customers by adapting their offerings.

By finding new, innovative ways of operating, you too can fend off threats even as you ride on opportunities that emerge in a fast-changing regional and global landscape – all this while we continue to work hard on rolling out new programmes to support SMEs in their business growth and journey.

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