Investments totaled less than 10% of sales for 75% of SMEs in 2018.
Singapore's small and medium-sized enterprises (SMEs) expect turnover to decline 15% in 2018 which is higher compared to the -11% projection in 2017, according to the 2018 SME development (SMED) survey conducted by Experian Group’s business analytics firm DP Information Group (DP Info).
A third of SMEs or 34% were noted to be facing external finance-related challenges, of which delayed payments from customers was the top concern for 84% of SMEs surveyed. On the other hand, two in five (44%) SMEs said they were facing internal difficulties managing their finances.
“They key concern amongst these SMEs was managing cash flow, liquidity and credit risk (50%), followed by challenges in hiring the right people to manage finances (24%) and planning and budgeting challenges in allocation of funds for daily operational purposes (24%),” the report revealed.
SMEs make up 99% of all enterprises in Singapore and employ approximately 65% of its workforce, DP Info revealed. Of the 10,000 SMEs in Singapore, 2,557 SMEs took part in the survey.
As a result of these concerns, hesitation around investing in their business transformation may have sprouted, the report cited, with investments amounting to less than 10% of their sales for the majority (75%) of the companies.
According to the report, SMEs are looking to ‘future-proof’ their business and become more receptive to government support in key areas of financing assistance and workforce and training development.
In addition, they are also looking to tap into industry transformation map (ITMs) programmes for assistance and direction, particularly in the areas of better access to overseas markets, improving industry manpower skill sets, ways to innovate and improve their respective business models and digitalisation of business processes.
Seven out of 10 SMEs already intent to embark on a digital transformation journey with a core focus on business operations, customer services and marketing of products and services, the report found, whilst a third (31%) have already adopted at least one digital solution in the past year.
“Though SMEs have shared that they are facing tough and challenging times on multiple fronts, it is heartening to see that our SMEs are proactively driving productivity improvements and business transformation, and heeding calls by the government and industry leaders to take advantage of Singapore’s digital economy push,” James Gothard, Experian Southeast Asia (SEA) general manager for credit services and strategy, said in a statement.
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