COVID-19 has brought about many challenges to SMEs around the world, regardless of size, location or capitalisation. Here are some of the top SME challenges during covid-19 pandemic.
#1 Uncertainty About the Future
Many businesses were forced to shut down permanently over the last 3 months after the government-imposed Circuit-Breaker restrictions and lockdown. One of the main reasons was due to the uncertainty as to when the business might be able to re-open and start operating again. For businesses that were able to re-emerge and operate today, many are facing significant challenges complying with the requirements ordered by the government and health authorities.
What can businesses do?
Stay on top of government advisory to ensure that you have the latest information to allow you to continuously reassess your business strategy. Ability to act fast and select the right option for your business will help you survive through the pandemic.
Ensure your business has sufficient funds and cash flow for at least 6 months. Lastly, have a plan in place to kick start your business once the time is right.
#2 Difficulties Accessing Customers
For businesses that managed to stay afloat during the current pandemic, getting access to new customers is not easy. Less people are out and about and everyone is watching their spending closely. There are several ways to continue sales activities during this difficult time – read more here. At the very least, this will help you prepare for growth once the lockdown is over.
#3 Cash Flows Concerns
One of the major SME challenges is the financial concern, including short term cash flow and debt exposure. Many business owners are struggling to make payments to creditors on time (or at all) and in addition having to support the on-going operational expenses such as salaries, bills and rent.
Is there any support for my business out there?
The Singapore Government has announced financial stimulus packages that your business may be eligible for. The Monetary Authority of Singapore (MAS) has also provided low-cost funding to participating financial institutions to support lending at lower interest rates to SMEs under the ESG Loan Schemes through the MAS SGD Facility for ESG Loans.
The package has been positively received by local businesses. About 2,500 loans totalling S$1.9 billion (US$1.3 billion) were issued in March and April 2020– six times the credit extended in the same period last year – with a high approval rate of 90 to 95 per cent.
Alternative finance like Invoice Finance is also helping local businesses get access to much needed funding by allowing SMEs to convert outstanding invoices into cash flow within 24 hours to support their operations.
Furthermore, it is recommended that SMEs continuously forecast cash flow on a regular basis to better control the inflow and outflow cash.
#4 Adapting to the On-Going Crisis
Many businesses are being forced to rethink how they operate. From facilitating employees to be able to work remotely and to offering their products and services online.
According to Facebook – “We’re seeing a lot of businesses that never had online presences get online for the first time, and we’re seeing small businesses that had an online presence now make them their primary way of doing business”.
#5 Concern about their Employees
Due to the pandemic, many businesses were forced to let go many of their employees. This has a direct effect on their families who rely on the affected employee’s income from the job. The Singapore government has implemented a Job Support Scheme (JSS) to provide wage support to employers with the aim of helping keep Singaporeans in jobs. Tackling one of many SME challenges that they are facing right now.