It wasn’t uncommon to hear passing news of a small business shutting down in 2018, or 2019. Yet as of March 2020, news like this became uncomfortably frequent.
The COVID-19 pandemic became a catalyst that forced SMEs globally to do one of two things; adapt to new business landscapes or become another unfortunate statistic. It was yet another dismal situation for SMEs, who were already burdened with pre-existing obstacles such as funding, awareness, and limited workforces that come with the territory of being a small to medium business.
Led by the International Trade Center, survey shows that two-thirds of micro and small companies show that the crisis strongly affected their business operations along with one-fifth of those businesses on the brink of shutting down for good in three months.
But even faced with challenging circumstances, there has been no shortage of SMEs that continue to be resilient amidst the turbulence.
Enterpryze has had the opportunity to support these SMEs working to rebuild, scale and manage their business better through our accounting solutions. As an organisation that works closely with founders, micro-business owners, and entrepreneurs — we continually pay close attention to the challenges that these very same business owners face.
In this article, we’ll break down five of the most common challenges that SMEs have faced along the road to recovery and how to overcome them effectively in a most crucial time.
Digital adoption
For some, the phrase ‘going digital’ brings about excitement and anticipation for the future of their business. For others, it only evokes fear of the unknown. Many SMEs continue to find the thought of digital marketing and solutions a daunting one to invest in because they mainly lack two things: someone with digital expertise and budget constraints.
Also Read: The WFH era: How SMEs should select the right digital collaboration tools
In a survey taken by 400 Singaporean SMEs, 56 per cent of them face barriers with the high costs of digitalisation, followed by another 40 per cent that lack a properly skilled workforce.
But if you’re an SME in that predicament, understand that even if your business lacks those two elements above — you’re far from an impossible situation. Enterpryze’s most successful customers to date understand that it’s the execution and timing that really matters.
For instance, a family-owned business used to depending on traditional print advertising or billboards shouldn’t be rushed into burning through US$10,000 in social media marketing overnight. In the same way, a social media agency shouldn’t be pressured to thoughtlessly spend thousands in random Google Ads in the race to be everywhere digitally.
Successful digital marketing campaigns are developed through time, strategy and a very keen understanding of where your target audiences are ‘living’ online. Only when you have those three factors can you build and launch a strategy that works in your favour.
In Singapore, companies even stand to receive up to 80 per cent of subsidies from the Productivity Solutions Grant for the adoption of approved digital solutions under the Go Digital programme. This was announced by the Infocomm Media Development Authority (IMDA) and Enterprise (ESG) to provide support for SMEs in the healthcare and education sectors.
Cash flow
The effects of COVID-19 could be felt across markets. Of course, those affected badly remained the SMEs who rely on physical sales such as restaurants, clothing stores, salons, etc. These are the ones who would have witnessed a steady sales decline in the early stages of lockdowns across the globe.
On the other hand, there will also be businesses that experience growth if they supply products and services that meet new demands. This could be any business from telemedicine, online education to an e-commerce store that sells disinfection cabinets.
Which category your business falls in depends entirely on your agility to adapt to a post-COVID-19 market. This goes above and beyond tweaking your marketing campaigns or conducting company-wide budget cuts. Even if that stems the bleeding for a while, any innovative SME owner digs deeper to thrive, and not just survive in their new business landscape.
Also Read: What can food-agritech startups and SMEs do for business continuity amidst the pandemic?
Ask yourself. Do you understand the new demands of your existing target audiences? How does your business leverage that? And if all else fails, is it finally time for you to pivot towards a more profitable direction?
On another note, it would be beneficial to also apply for government stimulus packages aimed at helping overwhelmed SMEs. Governments across Southeast Asia such as Malaysia, Thailand and Singapore continue to provide bank moratoriums, wage subsidy schemes and more forms of assistance to struggling SMEs.
Remote working
Love it or hate it, remote working has become a way of life that we adhere to. Still, it’s not difficult to understand how this becomes a challenging adjustment for those who have spent years in a controlled office setting.
Colleagues lose the chance to see each other in real-time, work-life balance becomes blurred, and the list of potential work-from-home cons go on. ‘Zoom fatigue’ — a very real and stressful side effect of improperly managed remote working practices is another prevalent one.
Adapting to this lifestyle is a universal situation, one that plagues multinational corporations with 200+ employees too. Enterpryze’s very first course of action was to not see remote working as ‘less than’.
Rather than view it as a temporary solution that’s less than ideal, Enterpryze continues to invest in comprehensive onboarding activities, interdepartmental meet cues, virtual coffee chats and each of our employee’s wellbeing just as we would in the office.
If you’re someone responsible for managing a team or overseeing projects, you’d also want to remove the burden of exchanging too many emails or scheduling unnecessary meetings that bleed into your employee’s time. In this situation, it would be wise to consider user collaboration platforms that allow for a more efficient workflow on a day-to-day basis.
Supply chain interruptions
A disruption to the global supply chain was clearly unavoidable after COVID-19 hit, which makes this another significant problem for SMEs.
A supply chain is defined as the system of how goods and services are distributed. Which means that if you were an SME who gets their products internationally, there’s a slight chance you could have experienced some delays with your shipment in 2020 that carried on to this year by newly imposed lockdowns or government regulations.
Also Read: MDEC seeks to encourage SMEs’ digitalisation with US$1.5M grant
SMEs in countries such as Malaysia have reported that their supply disruptions take the form of fulfilment delays and deliveries. Disruptions like these affect your overall revenue and customer satisfaction, which would ultimately hurt your business in the long run.
You can still minimise its negative effect by communicating with your vendors or manufacturers to understand how badly these disruptions go. Do you have knowledge of the inventory on hand? How long will production for more take? All of these are questions that you need answers to in order to plan things out on your own team.
At the end of the day, it would always work in your favour to source for back up vendors and manufacturers. Understand that if production and distribution are being stalled because of newly imposed lockdowns or the like — there is always the option to look for vendors and manufacturers from countries that would be able to provide a more effective supply chain experience.
Privacy concerns
With work from home orders in place, there’s a heavy dependence on an at-home Internet connection and remote access — which would result in a growing concern around data privacy risks amongst SMEs. Even after a year of the lockdown, SMEs still face the challenge of navigating amidst a new IT infrastructure to ensure that the company is still protected against cybersecurity threats.
Traditional office networks employ the use of virtual private networks (VPN), secure IP addresses and other methods to ensure the security of their data on a day-to-day basis.
Nonetheless, this is difficult to implement with tens (or even hundreds) of employees working from home via their own personal networks — which may not be as ideally secure. If not carefully monitored, this could open a Pandora’s box of phishing scams, competition-sponsored hackers, insider data leakage and more.
Those in management should be responsible for ensuring secure access for all employees working remotely. Evidently, the best way to do this would be to provide employees with a managed device they can work from while handling sensitive material. This course of action allows SMEs to install solid firewalls, ad-blockers, anti-virus software and encrypt their data.
Yet, if this is not possible with a limited budget, it still falls upon the shoulders of SMEs to educate their employees on the safest possible passage to work from home on their personal computer. This can be done by providing a comprehensive onboarding process to new and existing employees on the dangers of email attacks, requests for banking information (if an employee has access to company credit cards) and other potential threats.
SMEs who are searching for a consolidated way to manage their bookkeeping securely will find that Enterpryze offers sophisticated digital security that protects users from such risks — including data encryption, securely hosted backups, restricted access according to user levels, and password protection.
Truly successful SMEs do more than just survive in this time of turbulence. They have an unprecedented opportunity to scale at a phenomenal pace with the adoption of digital strategies, good management and supporting solutions.
Granted that founders, owners and managers alike will become close friends with impossible situations and difficult decisions on behalf of the company — one can only see the fruits of their labour when true proactive measures are taken.
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