Survival is now the foremost priority of most SMEs in Singapore. The economic fallout that was caused by COVID-19 and the subsequent lockdowns may have left SMEs in a destitution, but the fight to claw their way back out is no less harrowing.
While some owners have begun frantically diversifying business offerings to find new sources of revenue, others have taken on odd jobs to make ends meet.
Florist Pang Hui Ya, who co-owns 7pm Bloom, told The Straits Times that turnover had fallen b approximately 80 percent due to the many wedding cancellations over the months.
“The bulk of our business comes from doing floral arrangements for weddings, so during the circuit breaker period, we focused more on selling ready-made bouquets, but the revenue from that barely covers our costs,” said Ms Pang.
She also noted that a spike in demand for Mother’s Day did little to help alleviate the financial issues and costs of running her business.
The business also encountered other hurdles, from unsuccessful applications for government grants and financial aid to losing its rented store space – setbacks that have forced Ms Pang to dig into her savings and take on part-time jobs to make ends meet. Fortunately, the business is slowly getting back on its feet as demand is slowly returning.
Businesses in the service sector expect conditions to worsen over coming months, according to recent surveys by the Economic Development Board and Department of Statistics. Many business owners are now focusing solely on surviving month-to-month. Event companies in particular have been severely affected with some companies reporting up to a 90 percent drop in sales and revenue.
Singapore Business Federation chief executive Ho Meng Kit noted that SMEs with more limited resources are adversely affected compared to larger companies”, though the JSS has helped them meet cash flow and cost challenges, especially during the circuit breaker period.
He added that the Government had adjusted JSS payouts to support qualified shareholder-directors in addition to employees, recognising that many of them are from small businesses. Unfortunately, there have been a number of reports where SMEs have been refused support as they were considered ineligible.
Mr Kurt Wee, president of the Association of Small and Medium Enterprises, said that while continued government support is essential in helping SMEs cut costs and increase revenue, funding should be directed at businesses that would still be viable even beyond the COVID-19 pandemic.
This means firms must thoroughly assess their own “developmental potential, taking into account the industry and sector that they are in, and whether the business itself has strong fundamentals”, he noted.
“Once this has been established, businesses can then consider how they can diversify and grow their revenue streams amid COVID-19, taking into account the cost components and the government support schemes they are eligible for.”