As small businesses prepare to reopen after a challenging period, they are looking to reinvent themselves to ensure long-term competitiveness and resiliency. But easing cash flow pressures is the first order of business, a new survey reveals.
Three-quarters of Asean small businesses are seeking deferment on their loan repayments and three-quarters are renegotiating the terms of their contracts with suppliers and landlords to ease cash flow pressures, while 73 percent are considering Covid-19 related financing schemes to increase their working capital, according to the «Asean Transformation Study 2020,» published by UOB, Accenture and Dun & Bradstreet.
The survey was conducted among 1,000 small businesses with an annual turnover of $20 million and below before and during the Covid-19 pandemic in Indonesia, Malaysia, Singapore, Thailand and Vietnam, to understand how the small firms were adapting to the new business environment.
Technology Prioritised
Technology was ranked the top investment priority for 2020, cited by 64 percent of small businesses. While 88 percent have lower revenue expectations for the year, 44 percent intend to increase their overall technology budget, according to the study.
«Having had to cope with the disruption to their operations as a result of COVID-19, many of these firms realised quickly that technology can make all the difference to their business,» Lawrence Loh, UOB's head of group business banking, said.
«Small businesses that focus on their digital transformation to become more agile and future-proof should see a rapid payback,» said Divyesh Vithlani, who leads Accenture’s financial services practice in Southeast Asia.
New Business Opportunities
The report highlighted how technology can help small businesses revise business models and transform operations, in particular digital solutions that enable businesses to manage their operations effectively and virtually, and digital solutions for cash flow management.
«Firms which transform their business models for the long-term, even after Covid-19, will be better poised to tide through these current challenges and to create new business opportunities,» Audrey Chia, chief executive, Dun & Bradstreet Singapore, said.
