From going to the grocery store, to buying cai fan, the not-so-subtle increase in prices has left a not-so-small hole in our wallets.
These small costs add up, and in the case of small-medium enterprises (SMEs), they can snowball into something a lot more worrisome in an already uncertain economic landscape.
SMEs, like your mom-and-pop shops, are often sandwiched between rising cost of business and managing consumers’ expectations of low prices.
What’s more, Goods and Services Tax (GST) has been raised to 9 per cent.
According to an annual SME pulse check survey conducted by DBS – 42 per cent of respondents are worried about the rising costs of running a business amid inflation and higher GST.
The survey was conducted by SMEs across a broad spectrum of industries, such as food and beverage (F&B), manufacturing, and real estate in an effort to better understand the needs and concerns of the SME community.
This is followed by concerns over manpower, such as labour costs and availability, and issues arising from supply chain disruptions.
The survey also found that 43 per cent of respondents ranked “ensuring consistent cashflow and managing costs” as their top business priority in 2024, in line with their predictions that their budgets will only get tighter this year.
In fact, increased labour costs have also put a strain on businesses, which could be due to reasons such as the residual effects of Covid-19 on the labour market.
Despite the challenging business landscape, many businesses are still hopeful about their growth prospects.
This is highlighted in DBS’s survey, which found that 33 per cent of respondents are optimistic about their growth prospects, and look forward to potential opportunities in sustainability, digitalisation and expansion to new markets.
While it’s expensive and unpredictable to run a business, there are glimmers of hope for Singapore’s SMEs.
Support for businesses
This year’s budget speech will be delivered by Deputy Prime Minister and Minister for Finance Lawrence Wong on Feb. 16.
Addressing the concerns of businesses will be an area closely watched by industry leaders.
Sustainability has become a key priority for many businesses, and there is increasing scrutiny for SMEs to adopt sustainable practices.
However, high costs are a barrier preventing SMEs from doing so, and the availability of government grants and financing emerged as the top area where 87 per cent of businesses hope to get support when adopting sustainability practices.
Other top areas were expertise and advisory in navigating ESG (environmental, social, and corporate governance) regulatory standards and requirements (72 per cent), and training and upskilling of employees in sustainability requirements (58 per cent).
When businesses were asked on areas of support they would like to receive in this year’s budget announcement, 62 per cent of respondents said that they would like relief from rising costs.
Choosing the right banking partner
To help alleviate some of the financial burden, choosing the right banking partner is crucial.
A banking partner that provides cost-effective financial solutions was the top priority for 46 per cent of respondents.
This is especially crucial for businesses that are looking to expand their businesses and embark on long-term growth opportunities, such as overseas expansion, while juggling short-term challenges.
The right banking partner can also help expand your business into new markets.
Banks can play an important complementary role to businesses by providing research and insight into potential markets.
More importantly, they can lend a helping hand in providing financing support for businesses to scale.
DBS is committed to working with SMEs to build resilience and competitiveness in areas of regional connectivity, sustainability and digitalisation.
By leveraging DBS' strong presence in five core markets beyond Singapore, such as China, Hong Kong, India, Indonesia and Taiwan, SMEs can get ahead of the curve and scale their businesses.
You can learn more about how DBS is supporting SMEs with our banking products and services here.
