The impact of the pandemic has been swift, sweeping and severe for businesses across all sectors and sizes in Singapore.
Despite a gradual resumption of business activities, many enterprises remain uncertain about their future, given weaker consumer sentiment and a reduction in spending as a recession takes hold.
Many small businesses tend to operate on tight cash flows, so these firms are facing significant challenges in staying afloat.
A survey we conducted with 1,000 small businesses in May found that close to two in three respondents said they will be able to sustain their operations for less than six months based on existing cash flow. It also found that most are looking at digitalisation as one way to survive.
In fact, three in four small businesses in Singapore are already making investments in technology to boost their performance despite cash-flow concerns.
Enterprise Singapore (ESG) received more than 18,000 applications from small and medium-sized enterprises (SMEs) for the Productivity Solutions Grant as at July.
From our experience in working with small-business customers, we know that while they are aware of the benefits of digitalisation, they often face challenges in executing such plans.
Apart from having to dedicate scarce time and resources to such initiatives, small-business owners face an overwhelming number of options when it comes to the digital solutions available to them, making it difficult to determine the one that is most suitable.
In such instances, business owners should look to tie up with partners such as government agencies, industry associations, financial partners and technology vendors.
Such entities can guide business owners through their digitalisation journey as well as provide guidance on the grants and financial support available to reduce the cost of technology adoption.
For example, owners can speak with business advisers at ESG's SME Centres across Singapore to identify the areas in their businesses that can benefit from digitalisation.
SMEs will then be matched with technology vendors with the relevant solutions.
This will allow them to carry out their digitalisation activities with greater certainty and so increase their chances of success.
Pivoting to new avenues
Chinatown Heritage Centre (CHC) is one such small business that has digitalised in order to overcome the challenges of Covid-19.
CHC runs a museum shop in Chinatown and relies heavily on tourists for the bulk of its revenue.
While CHC had already made plans to go digital prior to the Covid-19 outbreak, the pandemic accelerated those plans as the company not only had to close its doors during the circuit breaker but also faced the impact of the halt to international travel.
CHC worked with United Overseas Bank to understand how it could set up its online store through the bank's e-commerce solutions partner, Shopmatic.
It was guided at every step in the process, from the design, structure and build of the online store, to product photo shoots, copywriting as well as logistics and shipping support.
UOB also guided CHC on accessing the relevant government benefits such as the Productivity Solutions Grant, to help it minimise the costs of adopting the solution.
While it is still early days since CHC's online store was set up, the business has been able to build up sales and maintain its engagement with customers virtually.
Firms in the food and beverage sector found that Covid-19 reinforced the importance of establishing an online sales presence.
While F&B companies do not lack options in terms of food-delivery solution providers, they may want to take a closer look at the partner's capabilities as well as cost structure before determining who to collaborate with.
One of the ways an ecosystem partner - such as UOB - helps F&B operators go online more easily and affordably is by establishing tie-ups to help the bank's customers enjoy preferential rates for their delivery needs.
UOB's collaboration with Getz allows F&B merchants to use its food-delivery solution, needing only to pay transaction fees that are capped at a maximum of 4 per cent of their online sales - a discount of up to 50 per cent from Getz's usual rates.
This enables F&B merchants to retain more income from each online food order while reaching more customers digitally.
Seizing the online opportunity
What might surprise some small businesses is that setting up an online store is not as difficult as they imagine.
Digital solutions such as Shopmatic can help small businesses build customised e-commerce websites in just 15 minutes.
By going online, small firms open their businesses to an e-commerce opportunity which, according to Statista data, is set to hit $4.8 billion by 2024.
Going digital also enables small businesses to respond more effectively to changes in consumption trends as more consumers take to the convenience of online shopping.
UOB data found that from January to August, e-commerce transactions among UOB card members grew by 52 per cent compared with the same period last year.
After establishing a virtual presence, small businesses will also need to enhance their visibility online to reach more customers.
One of the easiest and simplest ways is to sign up for Google My Business, a free tool that enables them to build their online profiles so that potential customers can find them more easily.
By signing up for Google My Business, firms will be able to include details such as their telephone number or a company description and respond to reviews on their Google profile, which helps in attracting more customers.
This is also reflected in Google's data, which shows that businesses that add photos to their listings typically see a 40 per cent increase in requests for map directions.
Customers can sign up for the service either through Google or UOB's websites.
The pandemic has led to irreversible changes in the way consumers behave, and small businesses must respond to remain relevant.
The case for transforming their business models through technology is more compelling now than ever.
Small businesses that can successfully complement their physical channels with an online one will stand a better chance at not only surviving the impact of Covid-19 but also seeing their companies thrive in the digital future.
The writer is UOB's country head of business banking in Singapore.