SMES SPEAK: TOP CONCERNS AND STRATEGIES
2014 SME DEVELOPMENT SURVEY SNIPPETS PART 1/3

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Singapore’s SMEs are changing. The combined impact of rising costs, manpower constraints and relentless competition is forcing local companies to adapt in order to remain competitive. As we move into an even faster-paced environment, getting timely information becomes more crucial. Daily business decisions are influenced by one’s knowledge of the market and knowing what others are concerned about could highlight potential problems within one’s business.

One way of finding out popular SME sentiment is via the SME Development Survey conducted by DP Information Group (DP Info), Singapore’s leading provider of credit and business information services. The annual survey is the definitive quantitative research on Singapore’s SME community, with a record 2,836 SMEs taking part. Part 1 of 3 of the SME Development Survey results is outlined in the infographic below:

SMEs’ Top 3 Cost Management Strategies

While costs remain a challenge for Singapore SMEs, commonly undertaken cost management strategies to consider are to source for cheaper supplies or raw materials (32 per cent), to raise productivity (30 per cent) and to reduce overheads (19 per cent). This is synonymous with the findings of 2013 – SMEs are still adopting the same top 3 strategies to manage rising business costs a year later.

Relooking Business Strategy in the Next 12 Months

SMEs are embracing the need to restructure with half (51 per cent) saying their main business strategy is to rethink their business model. It is a positive sign that SMEs are embracing the need to change and become more competitive. While a business-model rethink is the most common business strategy this year, nearly as many SMEs (50 per cent) plan to increase their production capacity in the next 12 months, indicating they believe they can keep ahead by working harder and delivering more.

What else are SMEs doing?

The proportion of SMEs planning to expand their range of products and services fell from 33 per cent in 2013 to 17 per cent this year. More SMEs are planning to do more of what they are good at rather than to try to diversify their offerings to capture new customers.

Government schemes and grants are also increasingly popular amongst SMEs. According to the Survey, 81 per cent of SMEs have successfully applied to at least one of the government grant schemes. Of the SMEs that successfully applied for a grant, a high 96 per cent have successfully obtained the Productivity & Innovation Credit (PIC) Scheme.

There was also a substantial increase in SMEs accessing manpower related schemes like the Workfare Training Scheme (up 17 per cent) and the Workfare Income Supplement Scheme (up 12 per cent). This concludes part 1 of 3 of the SME Development Survey results, catch part 2 of 3 in the next issue!

About the expert: DP Information Group (DP Info) is part of Experian, one of the world’s largest credit reference agencies. A veteran of close to 4 decades, DP Info uses its unique knowledge of Singapore’s business community to provide research, ratings and rankings that help clients make better decisions. DP Info’s key services include:

• QuestNet - An online information portal used by 98% of Singapore’s financial institutions and 75% of leading law firms.
• DP Credit Ratings – a proprietary credit rating model that reliably predicts the probability of company default.
• DP SME Commercial Credit Bureau – a member-based platform where the payment records of each members’ clients and suppliers are shared.
• DP Bureau – an ACRA-appointed SME service centre for both start-up and established firms.
• DP Credit Bureau – which analyses the credit records of millions of Singaporeans to assist financial institutions make lending decisions.
• The Singapore 1000 Family of Awards – Singapore’s most prestigious definitive corporate awards, honouring the nation’s best performing companies.

DP Info is an ISO/IEC 27001 Information Security & Data Management certified company.

For more information visit www.dpgroup.com.sg