Battling competitors is proving a major challenge for most smaller firms, according to a recent survey.
It found that 74 per cent of respondents saw industry competition as a significant issue, while 40 per cent pointed to manpower shortages.
Within the IT industry, finding skilled labour was a challenge for 43 per cent of those polled, while firms in the food and beverage sector cited high business costs arising from steep labour and rents as the main concern.
For labour-intensive industries, staff shortages were ranked second highest after competition challenges as they are affected more adversely by foreign employment curbs and policies. These include sectors such as logistics and transport, and manufacturing and services, which cover cleaning and security, for example.
The inaugural survey by Hong Leong Finance polled about 120 small and medium-sized enterprises (SMEs) on their key challenges and priorities, their adoption of digital technology, and the type of value-added services they want from financial service providers.
Sales growth was cited as a top priority by 75 per cent of the respondents across all industries, while 33 per cent named operations and production capacity expansion with proper cost management.
Securing loans and managing cash flow were cited as key priorities by 43 per cent of construction firms.
The survey also found that nearly 70 per cent of SMEs have stepped up the adoption of technology and digital tools to enhance productivity, particularly in the areas of business operations and finance.
The study also found that the most popular types of value-added services from financial advisers are those that offer economic outlook, overseas market information and advice on optimisation and cash flow management.
Businesses in the growth and expansion stages prefer advice on investment opportunities, while mature firms are more likely to enhance their profit and boost productivity by seeking assistance on digital adoption and implementation.