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Growth opportunities for SMEs still exist despite challenges, say firms
MARKET conditions may be challenging, but there are still growth opportunities out there for small and medium enterprises (SMEs), said firms at a panel discussion on Thursday at the launch of the Enterprise 50 Awards 2017.
The panel consisted of Mark Lee, chief executive officer of Sing Lun Holdings, and Rachel Lim, co-founder of Love Bonito. The discussion was moderated by Melvin Yong, country head of Singapore, CPA Australia.
For Mr Lee, many of the opportunities he sees come from abroad. Their main markets are not in Singapore, but in the United States, Europe and China.
The company's manufacturing locations have been moved overseas since the 1990s, with the main bases in Vietnam and Cambodia.
He said: "This has driven a lot of cost efficiencies for us even with the trend of business slowdown. . . Our CAGR (compound annual growth rate) of our profitability has been up 20-25 per cent for three years."
Similarly, Ms Lim shared that her business also manufactures in China, and is increasingly looking to Vietnam as costs start to go up. The brand has also expanded to Malaysia, Indonesia and Cambodia.
She said: "As an SME, because of our size, we are more nimble . . . we are able to move more quickly when we feel the pulse of the local market."
Both panellists said attracting the right talent is key, but conceded that SMEs face a bigger challenge due to resource constraints.
Ms Lim said one of the key lessons learnt since she started Love Bonito seven years ago was the need to bring in people "smarter" than herself. "As compared to bigger organisations, we cannot pay our people the way bigger organisations can. So for me, the main challenge is to speak into their hearts and sell them a dream and vision to get them onboard with us."
Ultimately, she pointed out that what millennials want is not so much money, but other intangible aspects such as personal growth, making a difference and working towards a bigger goal.
Mr Lee concurred that one of his challenges is attracting talent compared to a bigger company. But the other challenge he faced when he took over the company was an ageing workforce, as the company had been around since 1952.
"When I came in, the average age of our employee was at least 56. I made the conscious decision to bring the average age down because I need to create the next level of succession," he said.
Such qualities of foresight to plan for the future and the ability to differentiate itself from the pack will be what the Enterprise 50 Awards (E50 Awards) will be looking out for this year.
Organised by KPMG Singapore and The Business Times, the Awards recognise and reward the top 50 most enterprising privately owned local companies.
The theme for this year is "Innovate, Grow & Succeed: Staying competitive in today's economy" - an apt one considering the direction that Singapore is headed.
Chiu Wu Hong, head of enterprise at KPMG in Singapore, said: "Faced with rising costs and manpower crunch in a digital economy, it is important that companies reshape business models and innovate to stay competitive."
Since the first edition of the E50 Awards in 1995, more than 550 companies have been honoured to date, and more than 23 per cent of the past winners have gone on to be listed.
Wong Wei Kong, editor of The Business Times, said: "E50 this year takes place at an inflection point for Singapore and Singapore businesses. . . It's important for us to find companies that will set benchmarks and inspire others to rise to the challenge."
OCBC Bank returns as the main sponsor of the E50 Awards for the 12th consecutive year, while supporters of the Awards include International Enterprise Singapore, Singapore Business Federation, Spring Singapore and Singapore Exchange.
Nominations are now open, and will close on June 30, 2017. This year's E50 list will be announced in the fourth quarter of 2017, in conjunction with an awards gala dinner.