2020 has been a rollercoaster year for businesses in Singapore with COVID-19. Since PM Lee Hsien Loong’s announcement for the Circuit Breaker (CB) on April 3, there have been strict, but necessary restrictions put in place that has affected the way we live and work.
During this period where many modes of operations that were offline in nature had to be curtailed, certain industries such as aviation and tourism have taken big hits. A recent report in August stated a -5 to -7 per cent drop in Singapore’s GDP, as the country slips into a technical recession, making 2020 the worst performing year in the nation’s history.
Manufacturing output went down 6.7 per cent in comparison to 2019, while the unemployment rate rose from 2.4 per cent in March to 2.9 per cent in June, and retail sales dropped 27.8 per cent on the year in June as well.
However, other businesses such as e-commerce and delivery platforms enjoyed a spike in sales, proving that the pandemic isn’t bad for all business. The central theme that has been essential for business continuity and success during this period is the ability to go digital and pivot.
Local company EmpatKali enables interest-free instalment payments for offline and online transactions with a “buy now, pay later” model; has been bought over by Australia-based Afterpay. While mental wellness platform Safe Space has been making waves with online counselling as a viable option and strong supplement to the traditional face-to-face approach.
Heading into 2021, businesses that took a passively defensive stance earlier on are realising that the battle with COVID-19 will be ongoing, and the new normal is being defined as businesses react to new developments. As such, businesses have to take the initiative.
Also Read: How e-tailers should prepare for Singles’ Day amidst COVID-19
For entrepreneurs who are weathering the storm, or for those who are thinking of starting this journey, here are five things to consider before taking the plunge.
Get your house in a legal order
Establish a good legal foundation for the business. Shareholders’ agreements, founders’ vesting agreements, and IP assignment agreements are some of the things that need to be made clear to keep things transparent, and for the key people involved to be accountable.
Just as it is important to know how you’re getting your capital, knowing the responsibilities, obligations, and liabilities will make things easier in the case of an exit or dispute.
Understand your financial capital
The Singaporean government has been proactive in making sure existing businesses can stay afloat. Upwards of S$100 billion (US$73 billion) through four stimulus packages this year, and an additional S$5.8 billion (US$4.2 billion) heading into Q1 of 2021 to support the economy.
Before crafting a capital budgeting plan, be sure to educate yourself on what grants or schemes are available to you. In good times this process for a business would be akin to a marathon, though the pandemic climate makes it more challenging, the principles are the same – plan for the long run.
Do not be hasty in deciding on a capital source without weighing your options. Though raising funds through investors and VCs has been a route that startups, keep in mind that not all investor money is good money. Know what you’re getting into, and what is expected of you if you decide to take that round of funding.
Go at a workable pace
WFH (work from home) arrangements has become the default working arrangement that has led to additional challenges.
A recent report by Limelight Networks stated that 74 per cent of Singaporeans are more productive with WFH arrangements, but that came with longer working hours. Only 32 per cent of Singaporeans surveyed wanted WFH to be permanent, and 51 per cent preferred the flexibility to choose to be in the office or at home.
Also Read: Asia’s food delivery potential is set to unlock post-COVID-19. Here’s why
With WFH, entrepreneurs need to understand that different home setups and conditions make the WFH experience different. As exciting as starting a new business can be, the risk of burning out with extended working hours and always being connected is very real, and WFH can be rewarding, and not disruptive.
Be clear with your working hours, treat yourself, your partners, and your colleagues well. As with financial capital, plan for the long run.
Check your alignment, then scale up
Founders’ discord is real, between 60 per cent to 70 per cent of startups fail due to misalignment between founders and their teams. We have worked with startup founders who say one thing when they are together, but have completely different sentiments when approached alone.
Address whatever irks or bothers you. Small annoyances become much more than that if they occur more than once, and when the stakes become higher there’s more to lose that could have been avoidable.
For some startups, the real test begins when they see a degree of success. A common pitfall is when entrepreneurs over-extend themselves. Whether it is through adding new features, new products, or expanding the team, scaling up is not the only way to make a business better. We recommend taking a look at the book Small Giants: Companies that choose to be great instead of big, where there are examples of companies that have succeeded by focusing on being great.
Also Read: Singapore tech entrepreneurs raise funds to help Indonesian daily wage workers during COVID-19
Be ready to adjust, or be ready to quit
Never take things for granted, situations and context will change and taking stock of the situation regularly goes a long way. Like how bubble tea chains partnered with other food and beverage providers resulting in better sales during the period. Moving into the new normal businesses have to be ready to make adjustments when the time calls for it.
For the businesses who are struggling and might not see any end in sight, the new normal could mean a new beginning, and quitting now to regroup is not a bad thing. In some cases, a full stop comes before the right pivot and could be the very thing that leads to success.
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