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Singapore small businesses grew at strongest pace since 2015: poll
DESPITE financing difficulties and global trade tensions, Singapore small businesses grew at its strongest pace since 2015, according to CPA Australia's 10th annual Asia-Pacific Small Business Survey.
Some 58.7 per cent of Singapore small businesses grew from 2017 to 2018, the same percentage as from 2014 to 2015. While this is lower than the growth rates of 65.5 per cent and 86.6 per cent of small businesses in Malaysia and Indonesia respectively, small businesses in the Republic outperformed other developed economies such as Australia, Hong Kong, New Zealand and Taiwan.
Looking ahead, 60.7 per cent of Singapore small businesses are expecting to grow in 2019, the best result since 2013. However, their outlook is more cautious compared with other Asean countries surveyed.
Nearly a third or 32 per cent of such businesses expect to add staff in the year, the highest percentage since 2014.
Customer loyalty was said to have the most positive impact on small businesses here in 2018, while improved business strategy, cost control and improved customer satisfaction were also major factors.
Increasing costs remain one of the biggest challenges facing Singapore small businesses with 45.9 per cent of those surveyed stating that increasing costs had a major negative impact on their business.
Continued difficulties in obtaining financing further exacerbate the problem, with only 12 per cent expecting "easy to very easy access to finance" in the next 12 months.
The survey noted that such businesses remain somewhat reluctant to seek out external finance, with only 38.3 per cent of businesses requiring external funds in 2018, the lowest since 2014.
It said that the relatively low level of demand may reflect the difficulty in securing external finance in 2018. Some 60.3 per cent stated that the experience was difficult, making Singapore the most difficult market to access external finance in 2018 out of the 10 countries surveyed.
On the other hand, CPA Australia said this may reflect positively on the management capability of Singapore's small businesses as they are making better use of existing assets to grow their business and utilising internal funding.
While banks were the main source of finance for many small businesses, Singapore’s enterprises were the most likely among the markets surveyed to declare that a government grant was their main source of finance. It added that recent Budget announcements on improving small business access to finance may help ameliorate these concerns for some small businesses.
DIGITAL TECH USE
The survey found that local small businesses also demonstrated a strong focus on using digital technologies, with 62 per cent generating revenue from online sales. It said there is room for growth, as only 37.3 per cent generated more than 10 per cent of their sales online compared with the survey average of 50.3 per cent.
CPA Australia's manager of business and investment Gavan Ord said a stronger focus on online sales would be beneficial for the small businesses, as the survey showed that there is a strong link between this and business growth.
He suggested that while only 22.1 per cent of Singapore small businesses polled do not use social media, they could get more value out of it by learning about customer behaviour, and receiving and monitoring customer feedback through social media.
The survey gathered data from over 3,000 small business operators in Malaysia, Vietnam, Indonesia, Hong Kong, Singapore, Australia, the Philippines, Taiwan, New Zealand and China.