First, the good news: after a long circuit breaker, Singapore is easing restrictions. By the first week of June, it hopes to reopen 80% of the businesses.
The bad news is, if you’re one of the small-sized companies, cash flow can be tight or unstable. For the past weeks, your profits can be insufficient or even non-existent. How can you then manage to revive your business and help contribute to the Singaporean economy?
If you are looking to increase your working capital, here are a few ideas for you:
1. Obtain the Right Business Loan
The fastest way to boost cash flow or working capital is to get a business loan. However, for those in Singapore, it can be more challenging for a lot of reasons:
- Many lenders prefer businesses that have been around for some time.
- The loan terms might not be favorable. For example, the interest rate can be high, or the monthly repayment is huge.
- The requirements can be challenging to accomplish.
For small businesses, they can consider a business loan designed for them. Usually, this one doesn’t set any minimum or maximum loan amount. It can also extend loans to companies that are at least six months old. Further, the right program can provide money to both locals and foreigners.
2. Find Ways to Reduce Overhead Expenses
Overhead expenses are costs not directly associated with the manufacturing of goods or services. These include rent, accounting, and other professional fees, repairs, supplies, and insurance.
Sometimes these costs can account for a significant portion of the total business expenses. Fortunately, they are easier to manage than direct production costs. You might need to revisit them, though, to help reduce or even eliminate them when you can:
- Negotiate rent at least for the next half of the year.
- Check advertising strategies and focus efforts on those that work. Businesses can also consider digital marketing or hyperlocal marketing.
- Explore work-from-home arrangements for the employees. It can help reduce spending on utilities.
3. Sell Non-performing Assets
Assets, such as machinery, equipment, and even inventory, can shore up financial statements. However, they can also be a problem if they’re non-performing or non-income-generating. Machines and inventory, for example, can take up space that you could dedicate to income-generating ones. You also need to spend on their maintenance and repair.
While your company is still recovering, consider selling these assets. You now have the option to either rent or buy the equipment your business needs at the moment.
For inventory, you can offer them at a discount or add a tiny mark-up. It will help revive customer interest in what you’re offering.
Nokia and Blackberry were once leaders in the mobile market until competitors Samsung and Apple killed them. But it’s not because the latter companies have more funds. It’s because they innovated. Apple, for instance, introduced the iPhone, which was many-devices-rolled-into-one.
Innovation need not be financially draining or demand extensive research and development (unless the business calls for it). It can be as simple as pivoting, which means redirecting business efforts on products and services that might be necessary at the moment.
For instance, restaurants can offer deliveries or even create meal subscription plans. Groceries can produce bundles of veggies, meats, and fruits at different prices. Salons can sell DIY hair spa kits.
These are unprecedented times, and it’s unclear whether things will get better. But your business can ride the waves so that it will thrive.