Thorough financial prescription for an SME to survive in the harshly unforgiving SG business environ

Updated: Jan 4


Money makes the world go round not just once, but several times. Yes very true indeed: no money, no honey. Except an SME isn't blessed with a sizeable war chest, else life wouldn't be so darn thorny. Everything costs more than something these days- supplies, hiring the accountant, hell probably even your lawyer buddy back from the National Service days wants a piece of your ass simply for offering 5 minutes of legal advice. Coupled with soaring rental rates, increasingly expensive inventory and the taxman constantly breathing down your neck, it is surprising SMEs haven't been construed as "So Many (have) Exited".

When you are small, being supremely pessimistic might just see your business endure another day properly. But you say you want to achieve so much more; you want your baby to evolve into a juggernaut, to become the next Uber or Alibaba Group. Hey Peter Pan (or Daisy Duck or whatever your name is), dream those lofty ambitions when you are tucked in bed at night yeah? Until some angel investor comes knocking (more often than not and your grey matter knows it), time to stay really grounded in reality and start learning to be a world-champion penny pincher. Here's how:

1. Don't bite off more than you can chew

For starters, secure the minimal amount of resources needed to keep your business afloat. Do not rent more space than you need, do not purchase excessive quantities of stock. Any scaling up should be done with utmost care and thorough market research. Get ahead of yourself, you might just end up shedding enormous tears of grief when you get hounded by the landlord and a whole assortment of vendors for not being able to keep up with payment schedules.

2. Save, save and save some more

Not just for a rainy day, but also a possible massive thunderstorm. Anticipate dismal earnings associated with extremely lull trading periods, produce revenue forecasts and accumulate reserves to weather roller-coasters in consumer sentiment and seasonal influx of competitors. If you don't require a car to get to work, settle for public transport. If wholemeal bread, a hard boiled egg and plain water accounts for sufficient nourishment, so be it. An entire universe of enterprises have gone six feet under in their infancy stages because they were helmed by folks who didn't pursue serious money management strategies and splurged on senseless luxuries.

3. Invest, not speculate

Funneling cash into sensible upgrades and renewal of processes (albeit rather cautiously contingent on these happening well within one's budgetary means) can possibly reap dividends and make work efficiencies roll along; staking moolah just because you got a temporary hard-on for a prevailing trend could instead fetch you a coffin. Playing the conservative card when it comes to signing off on cheques may seem unglamorous, but if it can significantly reduce the odds of suffering an unwanted heart attack, why not?

4. Stop relying on government grants

Nothing wrong with getting some assistance from the G, however what happens if you grow addicted to things and they suddenly decide to turn the tap off? There ain't no rehabilitation centre you can simply park your ass in and breathe a bit better, instead be prepared to bleed to death if you can't adapt quick enough. Bottom line is: grow some self dignity and lay every brick with your own bare hands. Along the way you will acquire valuable takeaways related to cultivating resilience and self-sustenance. In the event your business flourishes, the credit is all yours and yours alone.

5. Do not borrow excessively

Sure, you require a little vitamin M on occasion to keep the engine revving, but over-leveraging is a big no no. Borrowing to finance impending expenses is definitely no crime all right. However when you feel the need to pledge almost every asset in your name save for that adorable pet bulldog to the lender institution as collateral, chances are you have taken things too far. It won't be a pretty sight when that business endeavour goes belly-up, and you find yourself in a sorry state of struggling to even service interest obligations. Knock knock....who's there? Bankruptcy beckons. So pretty please, with a cherry on top, dial back when you sense you have journeyed too close to the edge of the cliff.

6. Keep track of spending

Never be lazy, maintain a ledger which clearly articulates all expenditure. Know exactly what every cent was spent on. In this light you can discern the origins of bloated outflows and trim the fat accordingly. You can expediently determine which stuff to throw off the boat to streamline costs. If anything, not being completely oblivious to the circumstances under which you are shelling out cash might just prevent a serious haemorrhage of funds from happening right under your nose. Plus, neat books maketh a very happy accountant whose services can be more willingly retained.

Being your own boss gives you access to a valley of privileges- you get to run the show on your own terms and conditions, every moment of the day is in your hands. Then again you are very much accountable to yourself for every step (and misstep) undertaken, so virtues such as prudence and circumspection come to the fore. Saying a little prayer and wishing upon a star aside, business owners will attest to how hard it is just to keep one's head above water. So while you are having fun doing the entrepreneur thing, always navigate the unfolding terrain with extra care and due diligence. Slow and steady wins the race. Good luck.


#SME #ecommerce #money #finances

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