Despite a lull in COVID-19 cases and the end of the circuit-breaker lockdown, Singaporean SMEs are still struggling to make up for lost time and revenue. This is especially hard for businesses that require high physical contact in order to operate.
One such example is the Aesteem Aesthetic Clinic, owned by Mr Joshua Lung. Mr Lung told Channel News Asia that he has kept all ten of his shops closed since April since they were considered non-essential. Despite looking forward to receiving customers again, he is unsure what kind of safety measures health and wellness establishments will be required to implement, and if those restrictions will hinder the spa experience his customers are accustomed to.
With zero revenue, Mr Lung has only been able to weather the storm by receiving financial relief from the government, including rental rebates and the Jobs Support Scheme (JSS), which has enabled him to retain and pay his 35 full-time employees for the past two months.
“My main concern now is whether safety will be excessively restrictive until it discourages customers from returning as it significantly impacts the experience,” said Mr Lung.
SMEs bore the brunt of the economic devastation that was caused by COVID-19 and the subsequent lockdowns. Even as Singapore gradually eases restrictions, there are no certainties that business will recover to the pre-COVID levels in the near future.
With SMEs making up 99 percent of all of Singapore’s companies, 72 percent of its workers and 45 percent of the nominal value added to the economy last year, the challenges they face could have implications for the wider economy.
The reason why SMEs always struggle more than larger firms are simple. Firstly, they often have far weaker balance sheets and a harder times accessing funds and finances. Secondly, they are usually not as diversified as larger firms.
As a result, if an SME is dependent on one thing, and that one thing gets disrupted, then they get badly affected. In the case of a worldwide pandemic, SMEs with operations beyond Singapore are also suffering.
Without question, business is slowly returning to SMEs as Singapore eases their lockdown. However, it will very likely take six months or more for business to really take-off again. Until then, SMEs will still need to rely on their savings to pull through.