Many businesses remain resilient across the Southeast Asian region despite the shadow cast by the global COVID-19 pandemic. In Singapore, business sentiment among small and medium-sized enterprises (SMEs) is at its highest since the pandemic, with business leaders looking beyond recovery and seizing new opportunities to grow, according to a survey by the Singapore Business Federation (SBF) and Experian.
For many, however, the prospect of growth elicits a mix of excitement and fear. Especially in the middle of a pandemic, where businesses are experiencing unstable economic growth and general uncertainty of what is to come.
PwC’s Family Business Survey 2021 found that while 64% of family businesses in Singapore expect to grow in 2021, only 35% feel they have developed a sustainable strategy to thrive in the long run. With that, we explore how SMEs can adapt and grow their business in a post-pandemic era.
Staying Ahead of the Right Curve
Expansions and strategic partnerships allow SMEs the opportunity to stand out in a crowded marketplace. This is especially true when there has been a deluge of announcements in just the past few months. From the GoJek-Tokopedia merger to Grab’s USD 34B special purpose acquisition companies (SPAC) deal, SMEs have a long line of industry players to keep up with.
On the other hand, growth simply cannot be rushed. According to the same PwC survey, only 29% of respondents feel they have strong digital capabilities. As businesses keep their focus on diversification, expansion and digitalisation, there is still much that can be done to strengthen existing infrastructure and processes to navigate risks.
However, it is a healthy sign to see that while SMEs may not already have the technology solutions in place needed to boost their competitive advantage, they are certainly planning for it.
Moreover, business leaders understand that bigger isn’t always better – particularly when building a brand that inspires loyalty amongst customers. The more any small business grows, the harder it is to sustain the unique values and culture that attracted customers in the first place.
Mitigating Risks Left and Right
How, then, can SMEs grow while mitigating these risks? First of all, they need to understand the specific kinds of complexity, inconsistency and loss of control that growth can cause.
Once they grasp this, business leaders can take steps to maintain the competitive edge of being small—often derived from close relationships with vendors and suppliers—even as they scale up their operations. To fully implement new technologies, SMEs will need to acquire the right skills, as well as invest in significant time, cost, and resource. Thus, it is worthwhile to explore utilising external and expert resources to bolster or complement existing skill sets.
At this stage, SMEs will have succeeded in growing; but to make growth a sustainable process, they must translate their greater market share into even better products and services for their customers. Doing so forges a virtuous cycle where growth, if properly paced and planned for, creates higher and broader satisfaction with the business—and, in turn, more growth.
The SME Growth Playbook
There are a few tactics that can get SMEs started on this cycle.
- Stay true to the business core. Ensuring the unique selling propositions (USPs) — such as customer service, high quality and personalised products and services — remain unchanged even as operations expand is key. This can be done by clearly defining the brand values and goals that any new investment, technology, infrastructure or product development will achieve. Business leaders should also not be afraid to slow down organic growth if it threatens to compromise customer service quality. SMEs that expand too quickly may find themselves unable to cope with greater operational complexity.
- Build strong partnerships with other industry players that can lend their market share and reach. Partnerships can give SMEs immediate access to existing retail networks, supply chains and — most importantly — a well-established customer base. In some cases, they can also supplement the SME’s in-house resources, like customer service and support teams, with the workforce and infrastructure needed for successful expansion.
- Standardise and centralise operations to avoid dips in quality and productivity as a result of growth. For this to work, processes and technologies must be able to scale quickly and efficiently. Business leaders should design processes that require minimal upfront investment and can be run by small teams, ideally remotely. They should also seek out technologies that automate repetitive processes, even as workloads and business demands grow.
- Use the power of technology to further enhance USPs. An important tool for SMEs to consider is ERP (Enterprise Resource Planning), which manages all core functionality within one platform. ERP goes beyond being a financial system with inventory bolted on or a sales and marketing system with customer relationship management functionality. Instead, it should be thought of as a single-source solution for all core business data and functionality.
Growth can certainly be viewed as a solid win if it comes as a by-product of continuing business as usual, without the risks that come from innovation and expansion. But it could also be a win-win situation if SMEs choose the path of growth by sustaining their unique values and culture, being willing to invest in new technology, and building closer industry collaboration – during this challenging time and, more importantly, beyond.