Research finds Singapore’s small businesses are more optimistic on growth for 2021.
DigitalCFO Newsroom | 30 March 2021
Image by @Ivnatikk on Unsplash
Many Singapore’s small businesses had a tough time last year due to COVID-19. But according to global professional accounting body CPA Australia, local companies were less impacted than their counterparts in Southeast Asia.
Small businesses in Singapore were also most likely to report that government support or incentives had a positive influence on their businesses and that they had utilized such measures last year.
These are among the new findings from CPA Australia’s annual survey of small businesses in 11 Asia-Pacific markets, including Singapore.
The survey findings reported that 55% of Singapore’s small businesses said the pandemic had impacted them negatively. However, this figure is lower than for small businesses in Malaysia (67%), Vietnam (81%) and Indonesia (68%).
29% of Singapore’s small businesses said the government’s support measures had a positive influence on their businesses in 2020, while 27% sought out government support as a major response to COVID-19.
“The data suggests that the combination of fiscal, monetary and other measures, mounted by the Singapore government in response to COVID-19, helped small businesses navigate the worst recession that the country has faced in over 50 years and cushioned businesses from the worst of the impact,” said Mr Max Loh, CPA Australia’s Singapore Divisional President.
In 2020, the government funded approximately S$100 billion in stimulus measures to support local enterprises and the economy, while at the same time saving jobs.
More of small businesses in Singapore (53%) are optimistic about their growth prospects in 2021 compared with counterparts in developed markets like Hong Kong (21.2 %), Australia (41.4 %) and New Zealand (44 %).
Singapore’s small businesses are planning to increase their focus on innovation this year. Nearly 19% say they will introduce a new product, process or service that is unique to their market or the world in 2021, compared with 13.4% last year and 13.9% in 2019.
“Innovation is likely to result in business growth especially in an increasingly competitive and disruptive business environment. Small businesses will do well to continuously improve their product offerings, customer service or accessibility in order to thrive,” said Mr Loh.
Amist the pandemic, many small businesses digitalized their operations and worked in new ways in order to make ends meet.
More (84.6%) small businesses in Singapore used social media to promote their business last year, as compared to 71.2% in 2019. Only a quarter of businesses surveyed did not earn any revenue from online sales in 2020, a reduced number from 39% in 2019.
Singapore’s small businesses also quickly adopted new digital payment technologies. More than eight in ten (84.8%) received payment through platforms such as Grabpay, Dash, Pay Lah in 2020, up from 70.6% in 2019.
Profit is helping to drive this focus on technology. Over 38% of small businesses that invested in technology in 2020 reported these investments were already profitable, up from 35.1% in 2019.
There is a growing awareness of cyber risks among Singapore’s small businesses. Nearly four in ten (39.5%) reviewed their cybersecurity defences in the past six months and 36.5% expect the possibility of a cyber-attack on their business this year, up from 29.5% in 2020.
“The focus on technology is one factor that should support the recovery and long-term growth of Singapore’s small businesses. Contributing to this positive trend is Singapore’s excellent technology infrastructure and support for digital adoption given by the government to small businesses. Yet, with greater digitalisation, the risk of cyber-attacks increases. Managing cyber risks will help small businesses protect their operations and customers’ data, and importantly, build trust and reputation,” said Mr Loh.
The annual survey polled 4,227 small businesses in 11 Asia-Pacific markets, with 307 respondents from Singapore.
CPA Australia recommends Singapore small businesses consider the following measures:
- Consult a trusted professional adviser to improve recovery and growth prospects.
- Innovate to ensure business remains competitive.
- Improve internal cashflow management to reduce reliance on external financing.
- Incorporate technology into business operations.
- Make cyber-security a focus.