Singapore is experiencing an economic slowdown as the growth in Q2 slows to 0.1%, the lowest in a decade. In light of the almost-flat growth, there is a greater need for SMEs to be prepared for the future and remain competitive.
Singapore Economic Slowdown
The latest economic slowdown makes it harder for SMEs to keep their businesses afloat. Almost 40% of Singapore businesses expect revenue fall amid economic slowdown: finding from a survey conducted by Singapore Chinese Chamber of Commerce and Industry (SCCCI). Amidst operating in a challenging business environment, the following are some strategies for SMEs to withstand the tough economic times.
Don’t Quit Marketing
Marketing is a key contributor to a business’s success as it increases the visibility and promotes awareness of a brand. During economic slowdown, business owners will naturally cut back on costs. Business owners should be mindful not to overly-reduce their budget when it comes to marketing. This is unless, otherwise, compensated with increased marketing efforts in alternative channels which relatively do not incur a lot of money.
At the most basic, leverage on the Internet and ensure that the company website is making full use of search engine optimization. Email marketing and other online marketing efforts are also effective low-cost marketing tools at drawing online customers.
Focus on Inventory Management
Review inventory management practices to reduce inventory costs. However, not to the extent of compromising the quality of goods or bringing inconvenience to customers. Inventory should ideally be at the lowest possible inventory levels without being understocked. By reducing the amount of inventory held will free up much needed cash, maximising growth and profitability for businesses.
Develop Relationship with Existing Customers
It is much harder to win a new customer than to get an existing client for repeat business. A repeat customer is also an opportunity to make more sales without incurring additional costs of winning a new customer. Generating new customers are important to expand client base but the efforts in making existing clients to repeat their orders must be more significant especially during an economic slowdown.
When customers feel valued, they stay loyal to the business through good and bad times. This can be achieved by giving incentives or loyalty discounts to encourage and reward existing customers for their repeated business. Instead of losing the existing customers to competitors, they may even refer more sales opportunity.
Leverage on Technology
There are countless digital solutions available for businesses to tap on to streamline their business practices. Such examples include cloud-based apps, machine learning and cash flow solutions. Furthermore, with digital ecosystems integrating all areas of business functions, businesses can enjoy greater flexibility to choose the software or service providers that suits their business model best. Therefore, allowing their business to operate with greater efficiency yet cutting down on the operating cost.
Elaborating on the above example of cash flow solutions, applying for an invoice financing facility is as easy as pie with Xero-InvoiceInterchange Integration. No matter how tough the economy is, cash flow is essentially the lifeblood of businesses.