The uncertain economic headwinds around the world have led to a lot of tension or for lack of a better word, apprehension amongst the business community in Singapore. However, that is what we are saying, but it might not be what business owners are experiencing at the moment.
To find out if this was true, we looked at the “Sleek 2023 Small Business Index Survey: Perspectives on growth”, which is their annual report based on the study and analysis of over 640 Singaporean small business owners. The sample was drawn from Sleek’s database of customers, belonging to a wide range of industries, including tech, digital marketing, education, ecommerce, and consultancies, amongst many others.
To find out what the report says, we spoke to Julien Labruyere, Chief Executive Officer at Sleek. He leads the team at Sleek, which provides solutions for entrepreneurs that want to register new businesses. This is the second annual Sleek Small Business Index and examines the perspectives of Singapore small business owners on the current business environment and their expectations for 2023, against the backdrop of a challenging economic environment.
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For a quick snapshot, some findings from the report indicate that despite concerns over inflation and the broader economic environment, small business owners in Singapore are feeling good about the future and the health of their businesses. As many as 59% of business owners are optimistic for the future, with 63% expecting revenues to rise. Additionally, more than half of all businesses are comfortable with the health of their business, reporting positive cash flow (58%).
The businesses surveyed ranged in size (from 1 to over 500 employees) and monthly revenue (from S$10,000 – S$5,00,000). Nearly half of all businesses were between 1-4 years old; 21% were between 5-9 years old; 20% were in business for less than a year; and 10% had been operating for more than a decade.
What was the purpose of the survey and could you share some of the surprising highlights from the results?
Our recently launched Sleek Small Business Index examines the perspectives of Singapore small business owners on the current business environment and their expectations for 2023, against the backdrop of a challenging economic environment. It also outlines how these small businesses can pivot and scale during this period of time.
The report found that despite concerns over inflation and economic uncertainties, Singapore SMEs are feeling positive about the future and the health of their businesses – 59% of business owners are optimistic for the future, with 63% expecting revenues to rise. Additionally, more than half of all businesses are comfortable with the health of their business, reporting positive cash flow (58%).
Future optimism notwithstanding, we also found that there are still some concerns amongst the small business community today – 22% of Singapore small business owners said their biggest concern was higher business costs, followed by inflation (21%) and the economic environment (20%).
Given that you mentioned SMEs are highly susceptible to economic downturns, what do you think is driving this sense of optimism?
Many SMEs are founded by entrepreneurs who possess a strong sense of vision and determination to succeed. They have the ability to see opportunities where others may see challenges and are willing to take risks to achieve their goals, and this spirit is a key driver of optimism. SMEs are also typically more agile and flexible than larger businesses, which allows them to quickly adapt to changing market conditions. They are often able to pivot their business model, shift their focus to new products or services, or find new markets for their existing offerings. This ability to quickly respond to changing circumstances gives SMEs confidence in their ability to weather economic downturns.
Additionally, many governments around the world have recognised the importance of SMEs to their economies and have implemented policies and programs to support their growth. These initiatives include tax incentives, access to funding, and business development programs. This support from the government has given SMEs confidence in their ability to navigate economic downturns and succeed over the long term.
As a business owner yourself, what is your personal view of the current economy and outlook for your business?
I think the economy will overall see massive evolution driven by new technologies such as generative AI, automating large chunks of traditional and manual human tasks. Additionally, high inflation driven by climate change and increased prices for resources due to geopolitical tension will have an impact on consumer purchasing power. Having said that, I remain very confident that small businesses will keep innovating and adjusting to those new constraints much faster than larger companies which have taken more time to manoeuvre, like larger boats compared to small dinghies, and therefore will make the most of the changing environment.
How do you see the local economy developing in the next 12 to 24 months?
Looking forward, there are some positive signs for the Singapore economy. The country’s manufacturing sector has continued to perform well, with strong growth in the electronics and biomedical sectors. Singapore’s strategic location and highly skilled workforce also make it an attractive destination for foreign companies looking to establish a presence in Southeast Asia.
In addition, with the recent budget 2023 announcements, the government has announced several initiatives aimed at boosting the economy. These include measures to support SMEs, increase investment in research and development, and encourage the adoption of new technologies.
The Singapore economy has shown resilience in the face of significant challenges and has implemented measures to support businesses and individuals. While there are still some uncertainties, the country’s strong fundamentals and government policies suggest that the economy has the potential to recover and grow in the next 12 to 24 months.
What’s next for Sleek?
Sleek is actively working on R&D and our technology stack so that we can provide the best service at an affordable cost due to the use of AI which automated repetitive and error-prone manual work. We are also very focused on growing our non-base markets of Hong Kong, Australia and the United Kingdom and accelerating the adoption of our Neobank.