Survival Strategies for Small Medium Business (SME)

Survival Strategies for Small Medium Business (SME)

The rising of global economic uncertainties has touched the Singapore economy and put a downside to the country’s economic growth. Moreover, inflation that has been forecasted to grow higher than last year is affecting the entire economy and especially the cost of living, the cost of foods, materials, and even the cost of doing business in a country.

Singapore economy is powered by small and medium enterprises (SMEs) which make up 99% of all enterprises and employ 72% of all workers. Although they are the major player in Singapore’s economy, SMEs have faced difficulties in the recent years that can harm their business significantly, for example the increasing cost of labour. The inflation puts extra burden because SMEs faced higher cost as wages have continually grown and squeezed their margins.

Nevertheless, as a strong economic base, the small-medium enterprises can remain unaffected regardless of economic condition if they have some tactics to overcome the situation. Considering the digital transformation, it would be wiser to use automation technology as the survival tactic to face any economic condition, especially inflation that has been a burden for the business sustainability.

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If we compare, the usual manual process would not support the company’s position in the inflation, whereas technology has largely used as the tool to reduce cost, keep the productivity level, and stay competitive. In fact, the company has to decrease the cost in the manual process. Often, these manual processes demand certain number of labour even for the low-end processes. Implementing an automation technology has been proven to serve the company as a support system which helps the day-to-day process to be more efficient and helps to reduce the business process cost as it moves the entire process into an online system and eliminating the need to store many information and documents in a physical storage which will be costly.

Furthermore, automation puts pressure on wages by providing a substitute for low-end human labour. Meaning, technology automates many low-skilled tasks, allowing employees to focus their efforts on areas where their skills can add more value.

Let’s say your manual processes need two people for administration process. Automation can cut down to only 1 person to handle all the task, while the other person can handle another value-added task, with an easier method and ultimately more efficient. Paying 2 people, the administrative tools, and supporting tools with the price that gets higher overtime might endangers your company. Whereas choosing to use a S$ 5 per person/month for automation, eliminates the non-value-added tools, keeps you steady on any economic condition. Also helps you to get the most of your resources with a reasonable price.

Generally, SMEs are more optimistic to digital transformation to increase efficiency, attracting new customers, and lastly cost saving. Investing through technology, how it supports business operation, simplifies administration process and reduce the business cost on the storage and materials, is rather less expensive than paying for the tools which might become a waste later, not even bringing a much better result for you to survive the inflation.

With a reasonable price in the rising average prices, technology can be beneficial in long term more than the usual process which cost more as it’s not only serves as support and storage but also maintain the company productivity in the long term.

Note:
The infographic for this article is available to download at this link.

Survival Strategies for Small Medium Business (SME)

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