SMEs need to adapt quickly during downturns

Good and bad times are cyclical and instead of expressing pessimism, small and medium-sized enterprises (SMEs) should think out of the box to survive ("Most SMEs don't expect growth in revenue"; Thursday).

SMEs should implement changes in order to survive the downturn including having shorter hours, finding new customers in the local market and introducing new products or services.

Bosses must not hesitate to make personal sacrifices, even if this means cutting their own salaries.

SMEs must become innovative and creative to sustain and grow their business.

In a downturn, SMEs should review their financial practices and reduce costs where possible.

By offering staff a shorter work week, cutting perks and reducing overtime, the cash flow can be managed.

There are also many businesses that have survived crises and SMEs should look at what the businesses are doing right.

In a downturn, what is critical is how a firm focuses on its customers and that includes its ability to provide superior service.

Keeping existing customers is a critical objective during a downturn to encourage loyalty.

SMEs may need to form a strategic alliance or joint venture to allow reorganisation without a substantial reinvestment of funds during bad times.

There are many schemes available from government bodies that can assist SMEs in growing their business and revenue.

SMEs should take the initiative in approaching the agencies for such help.

But being able to adapt fast during a downturn is fundamental to an SME's success. Instead of lamenting slow business growth, SMEs should compete on service, quality and uniqueness.

Francis Cheng

A version of this article appeared in the print edition of The Straits Times on November 14, 2015, with the headline 'SMEs need to adapt quickly during downturns'. Print Edition | Subscribe