How to Succeed as an SME in Singapore

How to Succeed as an SME in Singapore

They’re here. 

The goliaths. 

They’re huge, have sharp teeth, and are here to eat the whole cake.

They’re the big companies, the giant brands with the hunger to dominate every marketing channel.

As a small business owner, how do you stand up against them? Much like the biblical story of David and Goliath, many would expect small businesses to be the underdog when going head to head with giant brands.  

But with proper tools and a few marketing tricks up your sleeve, that’s doesn’t necessarily have to be your end story. 

Unfortunately, many start-ups don’t even stand a chance. After studying over 100 start-ups post-mortem, it was established that about 19% of businesses failed because they were pushed out of the market by the goliaths in their line of business. In the same vein, 14% failed because they were struggling with marketing, and 29% had to close up shop because they didn’t have the financial muscle to compete with the big guys.

It seems the decks are stacked against the little guys. It’s scary, yes. But it doesn’t necessarily spell doom for you.

Thousands of successful start-ups have proven that it’s actually possible to compete with the major brands and even outperform them. 

We’re here to show you how and offer you all the guidance you need to succeed as an SME in Singapore, regardless of who your competition is.

But first:

What’s an SME?

An SME is a small or medium-sized enterprise or business with less than 250 employees. 

That’s the standard definition of an SME, any business with less than 250 employees, turnover sales of 50 million euros, and a balance sheet that totals less than 43 million euros.

Within the SME umbrella are four different categories of enterprises. These are small enterprises, medium-sized enterprises, and micro-enterprises. 

These categories are defined based on the number of employees and the annual turnover. 

Remember, this is the EU’s definition of an SME. Each country has its own definition of an SME, but that’s the standard definition, accepted by a majority of European and Asian countries. 

In the US, an SME refers to any business with less than 1200 employees. 

In China, the definition of an SME may vary depending on the industry. The upper limit of the number of employees in an SME may range from as low as 200 to as high as 1000, depending on the industry. 

Singapore’s Definition of an SME

An SME in Singapore previously referred to any business or enterprise with a fixed asset investment of less than $15 million for those in the manufacturing sector, and less than 200 employees for those in the non-manufacturing sectors. 

However, from April 1st, 2011, the definition was revised to refer to any business with a sales turnover of less than $10 million or a work staff of less than 200 employees. 

As you can see, this new definition is in more in line with the EU’s criteria of identifying an SME. 

Types of SMEs (Based on Eu’s Criteria)

There are three distinct categories of SMEs, reached as per the number of employees and the annual turnover.

Micro Enterprise:  Has less than ten employees and an annual turnover of less than 2 million euros and a balance-sheet total that does not exceed 2 million euros. 

Small Enterprise: Not more than 50 employees, turnover sales of 10 million euros, and a balance-sheet total not exceeding €10 million. 

Medium-sized enterprises: Has not more than 250 employees, turnover sales not exceeding €50 million, and a balance-sheet total of less than €43 million.  

The Role of SMEs in Singapore

SMEs account for about 99% of all the businesses in Singapore. They’re the backbone of the economy. 

They support the economy by significantly contributing to the GDP – to be more precise, they contribute to nearly half of the country’s GDP. 

Even more critical, SMEs are the biggest source of employment in the country, having contributed to a vast amount of job opportunities for the people of Singapore. 

The key factor driving the success of innovative SMEs in the country lies with its strategic flexibility as well as their ability to adapt. 

Many of the SMEs in the country are run by one or two people, most of whom establish a close connection with their customers. They understand their operations really well, the same way they understand the environment they operate in. 

As a result, their ability to evolve rapidly allows them to grow really fast and to respond to changing market trends rapidly. Furthermore, this flexibility allows them to make necessary transitions for competitive positioning. 

SMEs are the lifeblood of Singapore’s economy. For this reason, the government has mapped out measures and strategies that seek to promote their growth. 

There are tax exemptions. Moreover, companies with home-based offices are also encouraged to register and take advantage of all the benefits associated with SMEs. 

10 SME Ideas for those Who Want to Start Their Own Businesses

Woodworker

If you have passion for designing home furniture or other household items from wood, then this might be a lucrative business idea for you. A simple trick would be to design these items and list them on eBay or Carousell, and as your business  

Online Dating Consultant

An online dating consultant charges you for their time. They’re dedicated to helping people out with their online dating profile, and even source for possible matches from different places, something that Tinder just can’t. 

Freelance Developer

A freelance developer builds websites and other web products for other businesses. The also offer technical support or website management services. 

Personal Trainer

A personal trainer offers in-home training consultation services, as well as consultation on matters nutrition, exercise regimen, and so on. 

Translator

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If you speak one or two foreign languages, here’s your chance to make some extra money on the side by setting up a translation agency. You can narrow down your services to a specific niche area, like medical or financial translation. 

Garden Designer

If you have no trouble getting your hands dirty, then you can start a new business as a garden designer. As the name suggests, your job will be to design backyard spaces. You simply draw the designs for your clients’ backyard spaces. 

Videographer

As a videographer, your job will be to produce videos for your clients. The videos you produce can range from music videos, ad videos, weddings, and so on. 

Car-detailing Specialist

The devil lies in the details. Car detailing services are in high demand, so be prepared to receive numerous calls from clients that want to hire you for your services. 

Personal Chef

We all love to eat. But how many have the energy, let alone the expertise to prepare their own meals. That’s where you come in. 

Property Manager

Your job will be to take care of other people’s property. Ensure they’re well-maintained. 

How to Start an SME in Singapore

Ready to get started?

Well, here’s a simplified checklist of all the things you must do before launching an SME in Singapore:

Evaluate Your Business for Viability 

Don’t just rush into implementing your idea. Take your time to analyse everything and be brutally honest with yourself. 

How feasible is the idea? 

Is the service tailored for the unserved group of customers? 

If you’re entering an already existing market, then you’d want to make sure the market is big enough to accommodate you. 

Lastly, what’s your unique selling point? 

Answer all these questions to squash any doubt you have before taking the next bold step. 

Write a Business Plan

You don’t have to be exhaustive at it. Instead, focus on what’s important and in line with the goals you have – market analysis, operational plan, and competitor analysis. 

The next thing you want to do is to define your target market. You can start by creating a customer profile based on their interests, background, and demographics.

The more defined your target market is, the easier it will be for you to understand it. 

Most importantly, research your competitors in detail. Find out how long they have been in business, and what are their key competencies. 

Figure Out the Financial Part

Entering a new industry can be daunting, especially if you’re funding your business with your credit card and personal savings. 

You’re experimenting with the unknown, with no assurance on whether your money will ever come back. 

If you’re planning to hit the ground running, you want to make sure you have a solid financial plan in place. 

Figure out where you’ll get your finances from. Is it for your personal savings, will you be crowdsourcing, is it a loan, or do you have a standby investment?

Pick a Fitting Business Name

Your business needs a name, a good one, for that matter. 

A good name is all about the first impression. For this, you want to make sure the name us both unique and memorable. 

You also have to remember the ACRA (Accounting and Corporate Regulatory) doesn’t allow you to use a name that’s offensive, obscene, or vulgar in any way. 

Register Your Business Domain Name

In this digital, it wouldn’t be wise on your part to operate your business without a website. 

After you’ve settled on a business name, and ascertained that it’s in line with ACRA’s standards and policies, the next thing you want to do is check if the domain name is still available. 

While determining the domain name, you have to make sure the name can be easily memorised. One caveat: you should avoid adding a hyphen to your domain name. 

Choose Your Business Structure

You have to again decide which structure best suits your business idea – sole proprietorship, partnership, a private company, or limited partnership. 

Research the different structures and find out about their advantages and disadvantages. 

We recommend that you register the business as a private limited company because of the minimal requirement. Speaking of which, you’re only required to have one local company director, one local shareholder, a company secretary, a registered office address, and a paid-up capital of S$1 to incorporate. 

Take Your Time to Understand Your Tax Obligations

Don’t leave anything to chances. Research your tax obligations to avoid legal issues in the future.

Learn the basics of corporate income tax in Singapore, learn how to file the ECI (Estimated Charge Income), and, most importantly, note the dates to file these taxes. 

Appy for a Registered Office Address

One requirement for registering a business in Singapore is a registered office address. You need this address because that’s where all your official business correspondence, including the ones issued by the government, will be coursed. 

Your customers will also have the option to deliver packages or letters to you officially. 

If your plan is to trim your capital costs, you should consider registering your HBD or residential property instead of renting a commercial space for your business. 

Register Your Business

At this point, you’re free to go ahead and register your business with ACRA. An alternative would be to seek the services of a professional incorporating agency. 

For more information on how to register a company in Singapore, here’s a detailed guide to help you out.

Establish a Strong Online Presence

You need a strong online presence to succeed as a small or medium-sized business owner in Singapore. 

Social media has progressed from being an avenue for connecting, networking, and sharing personal information, to becoming an essential PR, marketing, and news dissemination tool. 

This is especially useful true if you’re a small business owner competing with giant brands. To complement your business launch, you can run a blog section on the side, where you’ll be posting helpful articles and essential product information. 

How to Compete with Big Companies as an SME in Singapore

One of the biggest challenges you’ll ever face as a small business owner in Singapore is keeping up with the big guys in your industry. 

These companies have big marketing budgets and a purchasing power that can easily overshadow small brands, both in the physical and digital space. Fighting them may seem like an uphill battle, but there are ways around it and a few tricks that might give you a leg up. 

Great Customer Service

This is where you beat any giant brand, no matter how big they are. As a small or medium-sized business owner, your advantage is that you can develop a more personal relationship with the customers you’re targeting.

Remember: customer service is just as valuable as the product you’re selling or the services you’re offering.  Customers aren’t just after end results. They also appreciate good experiences and relationships. 

Focus on providing a relationship experience that customers won’t be getting from giant brands, and you can be sure most of them will come to you before making a stop elsewhere.

Stay Innovative 

Your smaller staff and less formal production procedures make innovation a cinch for smaller brands. 

Larger companies might have the financial muscle to experiment with new things, but we all know that time is of the essence here. 

Your advantage lies with quicker execution. You have a more centralised location to plan, brainstorm, and execute ideas. That means that you can easily use innovation to gain a competitive edge over giant brands.

Improve Efficiency

By innovation, we don’t necessarily mean that you have to beat yourself up for a super-brilliant idea or step out of the way to implement cutting-edge technology.

Instead, it can be something as simple such as making a few changes to an already existing business process. You can even introduce a new tool that simplifies your daily tasks or makes your production process more efficient. 

Focus on Connecting with Your Customers

With small businesses, it’s much easier to establish a closer connection with the customers you interact with. Consumers engage with your business directly, on social media, and in person. 

It’s even more meaningful when you’re the one writing your blog posts, commenting on their social media posts, responding to their reviews, and so on. 

The other advantage is that the more you engage with your target audience directly, the more you’re likely to discover a new need and position yourself accordingly or as the go-to solution. 

Build Your Online Reputation

Being a giant brand doesn’t necessarily translate to being seen as big.

You probably know of a giant brand with a mediocre presence. The same can be said about small businesses with a big name in the digital sphere. 

You can be a small business with a well-earned reputation within your community. Customers love you and would on any day vouch for your products or services. 

Be useful to your customers, and focus on offering them the best services, and they’ll live to cherish your brand. 

Tap into a Niche Market

Don’t be a generalist. Instead, pick an area you excel at, and give it your whole. 

While bigger businesses will be focusing on reaching a broader demographic, you can focus on one specific segment of the market where your services or products are more efficient. 

Your competition may be investing based on regional or national sales trends. But you stand to benefit even more by focusing on what your local customers prefer or want. Study them, understand their needs to the fullest, and then figure out how to position yourself as the best solution they’ll ever need. 

Attract the Right Work Staff

Your work staff can either make or break your business. 

It’s simple: the better your work staff, the more your business is likely to succeed. 

You’re also reminded that a happy work staff translates to happy customers. 

Maybe you didn’t know, but your customers can tell if your employers enjoy working for your company. Their enthusiasm and drive to please customers and serve them to the best of their abilities stem from the fact that they actually do enjoy working for you.  

Essential Tips on How to Succeed as an SME in Singapore

It’s not just about competing with big brands. You need a strategy that drives your business towards the goals that you’ve set for yourself.

That said, here are a few tips that might help you succeed as a small business owner in Singapore:

Not Everyone is Built to be a Small Business Owner
Since someone succeeded as a small business owner, that doesn’t necessarily guarantee that you’re also bound to be successful. For what we know, some people tend to do so much better being on the receiving end of the paycheque. 

Have a Financial Plan

Don’t just jump into the business without first looking into your finances. 

Be sure to look into your money matters and make sure everything is squared before diving in. 

You Don’t Necessarily Need Bankers and Investors while Starting Out

Your business can still succeed without the contribution made by bankers and investors. A better approach would be to bootstrap everything. Use your savings, saleable items, or contribution from friends and family to fund the business at the start, and only invite investors or source for loans when your business begins to pick up.

Get Organised

There’s no way you’re succeeding as a small business owner in Singapore without getting your whole act in order. 

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Tasks have to be completed on time. You can start by creating a to-do list of all the things to be done. Immediately you complete a task, be sure to check it off the list as you work towards completing the rest. 

This will ensure you do not forget anything. It will also help you complete all the tasks that your business needs to survive. 

Learn to Keep Detailed Records

Successful business owners understand the value of keeping accurate records of almost everything they do. 

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You have to know where your business stands, financially and potentially. What challenges stand in the way? And what are some of the things you’ve done to circumvent or overcome them?

Study Your Competition

You have to know who you’re up against.

You have to remember that you’re not just studying your competition to beat them but to also learn from them. 

Find out what they’re doing right and pluck a page from them. At the same time, you want to find out about their mistakes and figure out how to best use them to your advantage.  

 Be Creative

You should always be on the lookout for new business ideas. What can you do to make your business stand out from the crowd? 

You also have to admit to yourself that you don’t know everything. Learn to stay always open to new ideas or different approaches to doing things. 

Be Prepared to Make Sacrifices

Starting a business in Singapore isn’t easy, especially in the early stages of opening your doors. 

The odds are high that things might not go according to plan. The business may also demand that you invest more time and keep pumping more of your hard-earned resources to sustain the business. 

You may find that you little time to spend with your family. 

Be Consistent

Consistent is a critical factor in making money as a small business owner in Singapore. Success is neither defined nor a one-time thing. 

Keep doing what you’re doing, day-in-day-out to succeed as an SME in Singapore. 

Ideas for Marketing an SME in Singapore

97% of Singaporeans learn about local businesses online. 

Your business needs digital marketing to raise awareness and increase ROI. Digital marketing isn’t just about promoting your products and services online; it’s about optimising your digital assets for your overall business success.

The Key Components of Marketing Your SME Online

https://youtu.be/AfZK_QMJMqI

You need the following to market your SME online:
Website

You don’t just need a website to promote your business online. You need a professionally done website that allows you to showcase who you are, where you’re operating from, what do you offer, and how your prospects can best contact you. 

Blog 

You need a blog to complement your website. Even by only publishing once a week, you’ll significantly improve your website’s visibility and increase your chances of landing even more customers. Focus on educating your potential customers, and watch as the rest of the chips fall in place.  

Email Tool

Another marketing tool you wouldn’t want to miss in your arsenal. It turns out, 73% of the millennials in Singapore prefer email communication, an opportunity that you wouldn’t want to take lightly. 

Conversion Tools

When prospects land on your website or blog, how do you intend to make them take action?

You need a simple conversion tool such as the Free HubSpot Marketing tool to help you out with the conversion process. 

Other conversion tools you can use include Hello Bar, Sumo, Land-book, Really Good Emails, SubjectLine, Buzz sumo, Similarweb, and so on.

Social Media Accounts

There’s more to social media than the fun account for socialising and connecting. For business owners, social media is a powerful marketing tool that you can’t simply afford to miss. 

It can help you increase your traffic, improve your online visibility, and connect with your prospects or customers. 

Marketing Tips for SMEs

Determine Your Brand Identity

You need a consistent brand identity to look professional and to be taken seriously by the customers you interact with. According to a recent study finding, about 77% of customers choose a brand, not a product. The fact that they like your brand is enough to convince them to buy anything from you.  

Identify Your Buyer Persona

Try to visualise the customers you’re targeting. What are they like? What do they prefer? What’s their job and what’s their favourite hanging spot online? Buyer persona tell the story of your ideal customer so you can figure out how to best market to them.

Design a Logo

Your logo represents you online. It’s the image that people associate your brand with every time they come across it, online or offline. You can start by deciding what colour scheme best describes your business. If you’re hiring someone to design the logo for you, then the first thing to do is to make sure that they buy into your vision and dream. 

Build Your Business Website

There’s no enough insisting as to why your business needs a website. The best part about it is that you can design a website with almost any budget. Just make sure the website is being designed on a reliable CMS such as WordPress. 

Track Your Website

Use Google analytics and other tools to track your website’s performance and identify all the areas that could use some improvement. 

Consult an Agency or Freelancers

Unless you’ve ever designed a website and successfully marketed it out there, you might want to hire the services of a digital marketing agency such as MediaOne to help you out with devising the best marketing strategy to move your business forward. Of course, this is something that you can still learn yourself. The only issue is with the steep learning curve and the fact that marketing is in itself hard work. 

Work on SEO/Write Optimised Blog Posts

After you’ve created your website, the next thing you want to figure out is how to drive traffic towards it. That’s where SEO comes in. 

Plan Your Email Marketing Strategy: 

The people that land on your website or landing page have already expressed interest. The least you could is to collect their contact details and make an effort to reel them in slowly by slowly until they finally make up their mind and decide to proceed with the intended action. 

How to Get Funded as an SME in Singapore

While it’s important that you use your own funds or borrow it from family and friend, so long as you’re not rushing into anything blindly, there’s no harm in getting your business funded by bank loans and investors. 

Here are a few ways to fund your business as an SME in Singapore:

Angel Funds: This is where an affluent person decides to finance your start-up for an exchange of ownership equity. Typically, angels fund businesses with their own funds. 

Venture Capital: Venture capital is provided by investors to start-up with long-term potential. They’re mainly funded by wealthy investors that want to invest their funds in businesses with long-term growth perspective. 

In Singapore, it’s not so uncommon to come across a start-up that’s being funded by both venture capitalists and angels. 

The only downside to getting your business funded by venture capitalists is that the business may succumb to mounted pressure for performance from th investors. At times, you may lose say in your company’s operation. 

Alternative Financing: Includes financing methods such as crowdfunding or business financing methods like invoice financing. 

Crowding is the most common methods of getting your business funded in Singapore. 

The Final Word

If you’re a start-up looking to set up an SME in Singapore, be sure to seek guidance with a reputable agency such as Media One to help you establish your business with a strategy that positions it up for success. 

Author Bio

Tom Koh is widely recognised as a leading SEO consultant in Asia who has worked to transform the online visibility of the leading organisations such as SingTel, Capitaland, Maybank, P&G, WWF, etc. Recently he was instrumental in consulting for a New York-based US$30B fund in an US$4Bn acquisition. Tom is a Computational Science graduate of the National University of Singapore. In his free time he performs pro-bono community work and traveling.
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