BUDGET 2014

Stand-alone business welcomes additional help

Restructuring Singapore’s economy and raising productivity, so as to reduce its reliance on foreign labour and raise average wages, have been a big challenge. In the run-up to Budget 2014, The Straits Times is running a series on how firms are taking steps to transform their businesses, with varying degrees of success. Today, Rachel Scully looks at how micro-SMEs have fared and the challenges that remain.

Mr Michael Soon started a small shop selling watches, clocks, batteries and trinkets in Marine Parade in 1979.

Business was brisk then and many customers came, hoping to find good deals on watches.

But times have been tough in recent years and Mr Soon, 69, says he now has to grapple with rising costs and manpower concerns.

He moved his business to Toa Payoh 21 years ago and now rents a 100 sq ft space there for $6,000 a month.

Competition is stiff as there are also several similar shops in the area.

He said in Mandarin: "There were some consultants who offered to help me set up a site online or proposed that I get a smartphone or tablet - but that does not solve my problems." That is because his business targets passing traffic or those who live nearby and not those who shop online.

He and his wife run the shop on most days with the help of one employee.

With fewer than three local staff on his payroll, Mr Soon does not qualify for the Productivity and Innovation Credit scheme which offers 400 per cent tax deductions and cash payouts to businesses that spend on staff training, automation, and research and development among other things.

During the interview, Mr Soon learnt of - and welcomed - the improved Innovation and Capability Voucher scheme which allows businesses to claim up to two $5,000 vouchers for implementing solutions from March 1. This includes buying equipment and hardware, as well as design and renovation.

Another problem which plagues stand-alone businesses like Mr Soon's is succession. "The hours are long and there are no days off, young people prefer jobs which offer better pay and a more pleasant working environment," he said.

"I will carry on working for as long as I can, but I'm not sure whether we will see such shops in the heartland any more after this generation of stallholders retires."

This article was first published in The Straits Times on Feb 6, 2014