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SME Featured Southeast Asia

6 of 10 small businesses in SG on ‘survival mode’ amid new COVID waves

Singapore As the peril of new waves of COVID-19 outbreaks looms, around 59% of small businesses in Singapore or around six out of ten of them say that they are basically on ‘survival mode’ in terms of operations, a new survey from global services company American Express shows.

The survey notes that only 28% of local businesses say that they are ‘thriving’, while 12% of local businesses note that they are at risk of closing their operations. About 1% of the business respondents replied that they have closed down their operations.

Despite the cautionary mood among the majority of these businesses, about 67% of the respondents are ‘cautiously optimistic’ about their future, noting that this year’s annual sale will be a lot higher compared to their pre-pandemic sales during 2019.

Reasons to note such optimism include increase in revenue from expanding their businesses online (46%), support from new customers (44%), and continued support from regular customers (40%).

In addition, 71% of respondents shared they are optimistic they can thrive in the new normal—with 76% having made adjustments to sustain their business in the next 12 months. The top two changes businesses plan to make in the new normal are to focus more on e-commerce and communicate more with customers via social media.

Ho Yat-Wai, country manager at American Express Singapore, notes that while local businesses are more optimistic after almost two years since the pandemic started, its volatility weighs heavily on business leaders’ ‘minds’, adding that the recent spike in local cases is an example of the fluidity of the situation and difficulty in planning.

However, optimism alone would not drive businesses forward, the study noted, as the uncertainty for concrete business plans to move forward are still prevalent. Only 45% of business leaders state a clear long-term strategy compared to 84% before the pandemic. Meanwhile, Another 25% changed their business strategy to become more agile to better respond to changes, rather than focusing on long-term planning. Among those who do not currently have a business plan, 23% attribute it back to uncertainty.

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SME Featured ANZ

Profits fall for New Zealand SMEs in first quarter of 2021

New Zealand – For the first months of 2021, small and medium enterprises in New Zealand have reported a decline in their profitability with 36% stating a downturn, according to the latest business monitor by professional services MYOB. 

The statistics reflect the three months prior to March 2021, with 12% of those surveyed admitting profits had reduced by ‘a lot’, while still a significant percent – 20% – have reported that profitability has also improved since the start of 2021.

Despite this, SMEs in the region are showing quite the optimism with over one in five or 22% expecting an improvement in profitability onto the coming quarter. This is in line with New Zealand SMEs having a similar sentiment on revenues. 

The same report showed that more than a quarter or 27% of SMEs in the country are forecasting a slight increase in revenue over the next 12 months despite the unpredictable year when the pandemic first emerged. 

After a number of lockdowns, SMEs based in Auckland have seen the most significant impact on their bottom line over a 12-month period to March 2021, with 44% of SME operators in the country’s largest center reporting a fall in revenue. In comparison, businesses in Christchurch fared better than the national average, with 35% reporting reduced revenue over this time, while nearly half or 48% of Wellington-based SMEs said their revenue had remained the same and 38% saw income fall.

Meanwhile, a big percentage of those surveyed – 41% – expect to generate the same level of revenue across the next 12 months, while 25% expect their income to fall.

Current statistics are an increase in positive sentiment where in last year’s report, 40% of SME operators expected their revenue to be down in 12 months’ time, with 21% predicting their revenue would increase.

MYOB SME Senior Sales Manager Krissy Sadler-Bridge said that overall, findings are a solid turnaround for “hard-working” SMEs. Considering the past 12 months when the SMEs had to endure the pandemic blow, Sadler-Bridge believes local business owners should be congratulated for not just hanging on but also finding hard-won opportunities amid some of the most challenging trading conditions the times have seen. 

On profitability meanwhile, she commented, “When a business makes a profit, they may have the funds to develop their business further, hire more employees or increase employee benefits, or for some SME-owners, pay themselves a solid wage – making profitability a key measure of progress for the sector.”