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What the Budget means for your business

Xero Community: Budget forum 2019


As our nation moves into its bicentennial year and into an ever changing global landscape, the Singapore Budget 2019 speech by Finance Minister Heng Swee Keat on 18 February, made clear the “Singapore way” for citizens and businesses. Mr Heng outlined three core principles, namely putting Singaporeans at the centre of the Government’s plans, planning long term while adapting and responding to changing circumstances, and allowing Singaporeans to tap onto private and public collaborations as they grow their business or upskill themselves.

In many ways, these pillars echo key elements which small and medium-sized enterprises (SMEs) and start-ups are already prioritising as they chart their growth in today’s challenging economic climate. This year’s Budget – acknowledged by Members of Parliament (MPs) as ‘pro-worker’ – sees the introduction of new initiatives such as the Scale-up SG programme and Innovation Agents programme, with the overall aim being to help businesses grow deeper capabilities, scale up, receive financing, and adopt objectives that build upon business sustainability in the long term.

Seeking Greener Pastures

The Xero Community: Budget forum which took place on 1 March, was held at co-working space, Distrii Singapore. The expert panel, comprised of Chew Mok Lee, Assistant CEO of Enterprise Singapore, Kevin Fitzgerald, Regional Director – Asia of Xero, Natasha Toh, Co-founder and Director of The Fun Empire and Keyis Ng, Co-founder and CEO of, unpacked key Budget initiatives for a group of  100 small business owners and entrepreneurs eager to understand how the new initiatives and expanded schemes could benefit their businesses.

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The discussion was centred around four main themes: fostering business success and expansion, technological transformation for SMEs, helping SMEs access working capital, and upskilling the workforce in the digital age.

The buzzword on everybody’s lips was expansion. Panel moderator, Tessa Khoo, Marketing Director – Asia of Xero, opened the discussion with a statistic from a recent study by Stripe, that businesses  which internationalised within the first year typically grew 141 percentage points faster in revenue and 15 percentage points faster in headcount than those who were slower to reach international markets. Asked about the two newly announced programmes by Mr Heng, Ms Chew emphasised that these initiatives build on existing ones offered by government agencies to help companies internationalise.

“At Enterprise Singapore, we understand that taking your first steps in a new market can be daunting,” she said. “We can help companies gauge the market potential, understand the industry competition and facilitate their business entry.” For example, the Market Readiness Assistance Grant supports companies in areas such as market feasibility studies, and the Enterprise Development Grant (EDG) supports companies to undertake capability development projects. It also has a component supporting companies’ set-up overseas, such as  funding for two headcount at a rate of up to 70 percent. The agency’s 36 overseas centres worldwide are also available to provide in-market assistance.

The Drive For Digital

The government renewed its support  for SMEs to adopt technology for their businesses in this year’s budget, with $1 billion earmarked to help  firms build deeper enterprise capabilities. For a company like The Fun Empire that seeks more customised solutions to help improve operations and efficiency, the EDG was one initiative that caught their eye. “Initiatives such as EDG are helpful for businesses like ours to increase our digital capabilities,” explained Ms Toh.

Mr Fitzgerald, who heads the Asia operations of cloud accounting company, Xero, believes that it is a baseline expectation from the economy that business owners use technology in their operations. He explained, “The adoption of technology will be key in ensuring that Singapore businesses continue to thrive in a globalised market, and the Singapore government provides ample support in this regard. There is really no need to be apprehensive about digitisation, as there is a community of experts and other business owners to advise you on how to best embark on your own digital transformation journey.”

Ms Chew concurred, adding that digitalisation offers plenty of opportunities beyond the shopfront. “Digitisation is not just for productivity anymore; it is also for the top-line. When you go digital, you create new business opportunities for yourself.”

The Capital Game

The SME Co-Investment Fund III, will see an additional $100 million injection on top of the $400 million already earmarked through a prior two rounds of injections. For small business owners like Ms Toh and Mr Ng, managing growth trajectory while expanding overseas is a highwire act of careful strategising. Mr Ng keeps lean by running a non-inventory model that does not require huge manpower resources and capital. “Since day one, we adopted a slow and steady approach that targets a niche but growing market,” he shared.

For Ms Toh, her  approach with The Fun Empire is to go for smart money and mindfully select financing partners who share their vision. “Our philosophy is to ensure we’re not just  taking funding money, but also smart money.” She elaborated, “Be it equity or debt financing, it is about finding the right partner that believes in your product and shares the same mindset that allows you to tap on each other’s business networks.”

Mr Ng said, “Different businesses have different needs; there’s no one size that fits all”. While some small business owners may feel the pressure that comes with going overseas – a prevalent point raised during the question-and-answer session – Singapore’s geographical and population constraints mean that internationalisation, along with digitisation, remain the best options for companies to stay competitive in the long term.

As advised by Ms Chew, startups and SMEs should first chart their own business plan and have clarity around their priorities before exploring how they can leverage government support and schemes to achieve success.

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