The Biggest Challenges Small Businesses in Singapore Must Overcome

Small business owners look forward to a bright future, but before they can start enjoying their ROI, they will have to ready themselves for the challenges of the first couple of years.

Data from the US Bureau of Labor Statistics shows that from 1994 to 2019, a little over 20% of small businesses close down in their second year. Further analysis of the data by mortgage broker LendingTree adds that 50% of small businesses close by the end of their 5th year, and about 75% are out of business after their 10th year.

Why do small businesses have bleak odds of success? There are many factors, but we can pinpoint several major ones that are shared by the majority.

Here are some of the biggest challenges that small businesses face today, and what they can do to ease their situation.

Getting Enough Funding

Small businesses may not need as much capital as startups with ambitious business roadmaps, but they still need enough to get things started. Owners must fund the renovations, rent, staff’s salaries, production, inventory acquisition, and overhead costs for the first months of operation without depending on revenues. Bear in mind that most small businesses recoup their investment after two or more years. If there’s too little capital, the business could go bankrupt before it even turns a profit.

Tip: A low-interest loan in Singapore for small businesses can increase your capital and sustain your business when profits are slow. This loan can be your primary source of capital or supplement your overhead months after you opened your business. It may be daunting to apply for a loan when you’ve yet to generate an ROI, but your ability to generate products (and by extension, profits) will be sorely limited if you have a nonexistent cash flow.

Increasing Brand Awareness

The first challenge for new small businesses is getting the word out about their products or services. It’s crucial to market ahead of the opening, but as most small businesses have little capital, they could divert the majority of it into other areas of the business.

It’s also extra challenging when the competition are bigger, older, and more established brands that are well-known and well-liked. Not only do small businesses have to make people aware of their existence, but they also need to convince the market to try their products and services out.

Tip: Optimize social media and word-of-mouth marketing to promote your new business. It’s the most cost-effective method of marketing to a wide audience if you have a brick-and-mortar establishment. Your target audience is more defined, which is advantageous if you want to run an ad on Facebook, for example, because you can use geo-targeting to reach the right audience. You can also ask friends and family to spread the word to their own networks of friends.

Earning Customer Loyalty

Getting customers to walk through the doors is one thing: delighting them is another. Not to be confused with customer satisfaction, customer delight is achieved by exceeding expectations and eliciting an emotional reaction from your customers. Delighted customers do not just remember the brand, they also become its loyal patrons.

This is challenging for small businesses that are offering something new and innovative or have a very niche market. With the former, the business has to create a strong and positive first impression; and with the latter, the business may have to compete with a long-established brand that has enjoyed a monopoly over the market.

Tip: Get to know your target market. Understand their needs and find out exactly what you can offer to meet those needs. Test your products and services, get honest feedback, and use the information to innovate and offer something “extra” that your customers will love. Meeting needs and exceeding expectations — if you achieve these, you’ll delight your customers and earn their loyalty early on.

These are just three of the biggest challenges small businesses face. Others are building an email list, attracting capable and experienced employees, and scaling or achieving growth at the right pace. There are no black and white solutions, but business owners can prepare and strategize so that they don’t fold because of these problems.

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Why Your Business Needs A Rainy Day Fund

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Every business can benefit from setting aside money into a rainy day fund. In the event of a disaster, such money could help to pay for any reparations. This could include paying off a lawsuit, covering employees wages during a period of closure, replacing broken machinery or making repairs to your premises. 

The following post explains in more detail why you need a rainy day fund – and how you can go about setting one up. 

You can’t always plan for disasters

Preventative measures can be taken against some disasters. For instance, investing in security measures could help to reduce the risk of getting burgled or being the victim of a cyberattack. Alternatively, it may be a wise idea to invest in flood defences if you have an office based in a high risk flood zone. 

Unfortunately, you cannot plan for all disasters. Just take the pandemic as an example – before 2020, few businesses would have ever predicted such an event. Those that had a rainy day fund set aside have been able to use this to keep their business alive. For businesses that didn’t have savings set aside, it’s been much harder to deal with the closures and restrictions.

In essence, a rainy day fund is a useful form of financial backup for those hard-to-predict disasters. If a surprise storm hits and you need to pay for storm restoration, it’s unlikely you’re going to have storm insurance if you don’t live in a high risk area. A rainy day fund could be a more flexible option – serving as an all-purpose form of self-insurance that you can dip into if necessary.

Saving is a better option than borrowing

When disaster strikes, some businesses simply take out a loan. However, saving up a rainy day fund has many benefits over borrowing money:

  • A rainy day fund is cheaper. You won’t have to pay interest (in fact, you can earn interest by putting your money into a savings account).
  • You don’t have to worry about finding a lender that will approve you. If you have a low credit score, savings are a much better option.
  • When using savings, you don’t have to owe anyone. This means not having to pay back the money in installments. 

How to set up a rainy day fund

Ideally you want to put your rainy day fund into a high interest savings account. This should be an account that you can still access urgently when necessary. To prevent you dipping into this money for other purposes, you may want to look into savings accounts with withdrawal penalties. You can compare business savings accounts online to find the best interest rates.

Building up a rainy day fund takes patience. Put as much money into it initially as you can and then try to contribute money on a monthly basis to build it. You should try to keep a minimum of $500 in this account so that you’ve always got some money to fall back on when disaster strikes.

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Top Tips For Growing Your Business

As a business owner, you should always be looking for new ways to grow and develop. This will allow you to reach out to more customers, develop a loyal base of supporters, and significantly increase your earning potential. With that in mind, here are some tips for growing your business in 2021!

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  1. Develop your online presence and digital marketing methods.

We live in a society that is dependent upon technology. Therefore, you should strive to curate a strong online presence for your business or brand. There are various ways you can do this, including running several social media accounts (Facebook, Instagram, Twitter), setting up a quality website, and finding alternative sites on which you can offer your products and services, such as Etsy.

You should also focus on your digital marketing, ensuring that the adverts you create do their job. Focus on analytics – who is looking at your adverts, and who are they inspiring to make a purchase? Which adverts are working, and which aren’t? Edit them accordingly! 

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  1. Ask for feedback

Your customers are instrumental to your success – therefore, you should value what they have to say above all else. One way in which you can allow your business to grow is by taking on feedback from customers and applying any necessary changes. For example, if your customers like a particular product but would prefer to buy it in a different color, consider expanding your range. Alternatively, if you receive negative reviews for a service – think about any changes you can make. There are various ways to ask for feedback from customers – you could ask them to leave reviews online or participate in focus groups. 

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  1. Don’t do it all yourself.

When you run your own business, no matter the size, you are in charge. This can feel incredibly refreshing, especially if you were unhappy in previous employment. However, just because you are in control does not mean you have to do everything alone. In fact, doing EVERYTHING on your own is likely impossible – especially if you are trying to do things that you have never done before. For example, you can rely on ELogistics to tackle the logistical side of your business, such as shipping and ocean freight. This means that your products are in expert hands, and you have more time to focus on other areas of your business. You can find more here about the brilliant work that ELogistics do! 

Photo by HIVAN ARVIZU @soyhivan on Unsplash

  1. Networking

Networking is another excellent way in which you can grow and expand your business. Start with your local area, and reach out to other vendors operating nearby. When building a relationship, you will be able to share tips and tricks and provide guidance when necessary. You can also use your friendships to support your business by collaborating. For example, if you run a clothing store and partner with a beauty company, you can host a competition on your social media channels – giving entrants the chance to win a hamper of both of your products. The contest will help new customers find your company and will increase your earning potential and customer base.

5. Invest Back into your Business

It is important to invest back into your business, to ensure it runs as efficiently as possible. You do not need to upgrade everything in your company, but there will be some tools in particular that will hinder your progress if they are not. Some of the most effective investments you can make are, for example, upgrading to Microsoft teams phone system so your employees can work efficiently and collaboratively, keeping your database safe and secure to ensure there are no data breaches, and finding new ways to get feedback and insights from customers and about their behavior so you can continue to improve your business.

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4 Tips to Find a Hobby That You’ll Love

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Everyone needs a hobby, even if it’s just to keep busy on lazy Saturday afternoons. Of course, this ain’t the only reason for finding hobbies. They are great for mental and physical wellbeing, and they can also help you find a group of like-minded people who can become brand new friends. Finding new hobbies can be tricky, though, especially as an adult. You’re never sure what’s really right for you. If you’re looking for something new to drive headfirst into, here are four tips to help you find a hobby you’ll love. 

Do Your Research 

There are so many options for you to choose that picking a new hobby can feel a little overwhelming. It needn’t be like this, though. You can whittle down potential hobbies by doing your research. Consider what appeals to you, what you’re already good at (or at least enjoy doing), and go from there. This should prevent you from wasting time on a hobby that just isn’t right for you, saving any frustrations or unnecessary spending. 

Get the Gear 

Do you really need the gear? Well, this depends on the type of hobby. You can do some hobbies without the gear at all, like writing or even getting into fitness. However, many hobbies will demand at least basic gear. If you’re developing a passion for fishing, electric fishing reels are an excellent accessory to add to your kit. You might not want to spend too much in case the hobby doesn’t stick, but investing in suitable gear will make your life easier and ensure you actually enjoy the new hobby you’re trying out. 

Find Online Communities 

The internet can have a bad reputation for misinformation, toxic encounters, and scammers. However, there is also plenty to enjoy on the internet, especially if you’re looking for advice about a new hobby. Whether you want to know which is the best camera for beginners or are unsure how to use epoxy resin products to the best effect, you will find someone, somewhere who can tell you everything you need to know. All the information you need is often just a click away, so make the most of it, and make friends with people on the other side of the world. 

Don’t Settle For One Thing 

The sunk cost fallacy is something that often impacts many people when they get into new hobbies. They put so much time into something that they feel the need to see it through to the end. This doesn’t always work, though. If you want to give yourself the best chance of succeeding with a new hobby, don’t be afraid to try a few things. This will give you something else to fall back on, or it could even give you so much to do that you never stop being busy. 

Give It Time to Bloom
Not all hobbies take overnight, and while you might not feel great about it at first, giving it time to bloom will mean you give your new hobby a chance. Finding the perfect new hobby is all about patience, and you need to accept that you won’t be perfect straight away. Learning is all part of the fun, too, so embrace the experience and enjoy yourself, whatever you choose to do.

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