Designing cross border expansions for business with technology

Photo by Monstera

Singapore-based architecture practice Kaizen Architecture provides architectural consultancy for the residential, commercial and hospitality sectors, while also designing interior spaces and furniture.

Founded just before the COVID-19 pandemic, in Q4 2019, the practice has grown and expanded in the past 4 years beyond their borders by setting up a satellite office and also working regionally in Malaysia and Vietnam. Assisting them is ANEXT Bank, whose financing programme offered to SMEs has granted them access to an easy-to-adopt loan product with flexible repayment options.

SMEhorizon speaks with Melvin Keng, Principal Architect, Kaizen Architecture on the company’s expansion beyond Singapore’s borders, and how they leverage ANEXT Bank’s services to achieve their aims. Toh Su Mei, CEO, ANEXT Bank also shares on the financial needs of small businesses like Kaizen, their cross-border ambitions, and how technology can help.

The growing pains of international expansion.

Kaizen started expanding in 2023. Keng recalls that “the commute and travel for physical meetings (especially for site inspections) can be quite challenging from the aspects of time and effort. However, our industry does require physical supervision and inspections to ensure works are done in accordance with the design.

“Differing work culture is also a challenging aspect of the serving these wider networks – I think navigating the different work styles/ cultures can be challenging as in some instances, as we are probably more tuned to the way we work in the Singaporean context. As the practice of architecture is often team-based, these differing work cultures may cause some delays in communications.”

Compounding these operational challenges for small operations like theirs are the wider issues in the current business climate. Toh notes that while “Southeast Asia’s cross-border e-commerce is set to grow by about 220% from US$36.7 billion in 2022 to US$81.8 billion in 2027 according to new IDC estimates , and borders have reopened which has driven trends like ‘revenge travel’. But we are also witnessing supply chain disruptions, higher for longer interest hikes, rising oil prices, geopolitical tensions – all of which weigh heavily on the outlook.”

At the same time, there is the fact that several of their financial needs remain underserved by the banking sector. Toh explains that this includes those “ who have pivoted their business models to hybrid and digital-first, and their needs of accessing digital financial services where they do businesses have not been met.

“For these businesses to stay competitive, they will value digital financial services that enable rapid and efficient fund reconciliation processes that improves the timelines of cashflow, lower expenses, a more seamless connection to various global digital platforms and of course, cheaper loans,” she adds.

Technological help for SMEs overseas expansion

However, notes Toh, with the growth of various digital service platforms that entrepreneurs are leveraging to run their business digitally such as accounting, procurement and payment service solutions, existing technologies from partner providers can be leveraged and access to financial services scaled, making it easier for SMEs to get support to expand across borders.

For Kaizen, their partnership with ANEXT Bank through their financing programme offered to SMEs has granted them access to an easy-to-adopt loan product with flexible repayment options. “The loan features gave us full control on getting and paying for the funds only when we needed them – that really helped with cashflow, which can sometimes be very intermittent in architecture and construction projects,” adds Keng.

Capitalising on cross-border e-commerce

Toh notes that It’s easier than ever to go digital and to go global now especially with support from local governments and industry players who are building ecosystems and digital infrastructure to support SMEs’ digitalisation. “Besides understanding the market and developing a well-defined strategy for expansion, expanding internationally can be capital-intensive so it’s essential to have a solid financial plan and access to the necessary funds.”

“Going digital automatically removes the distance and barriers that used to prevent one from connecting beyond their immediate network,” she continues. “With new business contacts and exposure to new ideas and opportunities, limitations around how a business should grow is then also removed. Gone are the days where the logical expansion is to stick to doing the same thing but scale in size; these days we also see SMEs start to include complementary businesses as part of their growth plans.”

Keng echoes her enthusiasm, advising other SMEs to be “courageous and cautious at the same time. Don’t miss out on opportunities, even if it means sacrificing a little on your remuneration – every opportunity must be treasured. Also do all the necessary due diligence and always be prepared to have measured risk.“