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Stories from modern towkays: Financing SMEs

“If you think doing business is just waltzing into the restaurant [to make easy money], you’re wrong.” 

Take it from Selva Gunapathy, owner of Royal Prata & Curries Corner, a popular prata joint along Killiney Road. 

An entrepreneur with over eight years of experience running his own businesses, Selva considers manpower management his biggest hurdle. 

“Sometimes they don't come. Sometimes they don’t want to work weekends, which is when the business is at its best. They come in with a long list of what they want, and when they’re hired, go on MC (medical leave).” Selva said. 

To circumvent the issue of manpower, Selva proposed two solutions. 

“We shortlist the hardworking ones, increasing their salary in order to retain them and reward them for overtime work.”

Another solution is to automate restaurant services.

“Customers can order their food using a self-service system. The requests will go straight to the kitchen to be prepared and that’ll cut down a lot of manpower in terms of floor staff.”

These solutions not only reduced the issue of manpower shortage but allowed Selva to refocus his energy in developing other areas within the business - including being a GrabFood merchant partner. Yet, these changes resulted in high overhead costs, and were part of the reason why he decided to take up a business loan from GrabFinance. 

“It’s good when [people] can see how our business is doing on the Grab merchant app. That’s very helpful [where Grab] creates an ecosystem where they know what business owners need, whether it’s increased financial input or visibility for the brand.” He added. 

There are around 220,000 Small Medium Enterprises (SMEs) in Singapore since the last government census in April 2019. Financial movements from SMEs make up a significant part of Singapore’s GDP, but these enterprises are much more susceptible to liquidation and closure. 

For Shilpa, owner of Shivshil Cuisine Private Limited, having started Siam Sensation which primarily serves authentic Thai cuisine, closure almost became a reality. 

“After the successful first outlet, I started a second, and subsequently a third. But last year, we encountered cash flow issues,” Shilpa shared.

Source: Siamsensation.com 

“As a GrabFood partner, I was already using Grab merchant app to ease the payment process. My husband saw that GrabFinance is financing loans, and encouraged me to try to get our cash flow in check.”

Over the past five years, and with her expanding business, Shilpa turned to GrabFinance, which provided her with the cash-flow stability that she needed to get through this rocky period. 

“Especially for SMEs like us, GrabFinance business loans are efficient and fast ways to help businesses when we need a quick cash flow fix.”

Whether you’re looking to increase your working capital, manage daily operating costs, purchase inventory or meet other short-term business needs, GrabFinance business loans can provide the cash flow solutions your business needs. Find out more here.

This content was produced in partnership with GrabFinance.

All information provided "as is” for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein.

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Overcome the pains of entrepreneurship

You have seized the opportunity of a lifetime, turning your business idea into reality. 

It has been a learning journey, with many ups and downs. From pitching your business idea to inventory management to handling tough customers, you faced one challenge after another, and overcame them.

If you are ready to take your business to the next level, here are some valuable learning points from entrepreneurs and SMEs:

Ace your customer service

Make building a loyal customer base a top priority in your business. 

Foster long-term relationships — loyal customers are worth 10 times the value of their first product, so help them fulfil their needs. Train your staff to always add value and go the extra mile for all your customers. It will reap handsome rewards further down the road. Inculcate a collective commitment to exemplary service, and provide them with customer management skills in tandem with product knowledge training. Empower your staff to make decisions, such as offering a discount to customers when necessary.

When it comes to improving your business, your customer is the best teacher. Ask them for feedback — good and bad. Negative feedback provides entrepreneurs and businesses with the opportunity to find out what customers look for, and are willing to pay for. 

Once the feedback has been implemented, be sure to follow up with the customer. Let him know that you have listened and as a result, added the new, suggested feature, or eliminated an old one.

Platform perfect

Your choice of e-commerce software can impact the stability of your business.

From Shopify to Magento to BigCommerce, entrepreneurs and SMEs are spoilt for choice when it comes to putting their business online.

Assess your shortlisted platform’s viability by buying a similar product or trying out a similar service on it.

The best way to determine if a platform works is by using it — if you are not convinced, it will be hard to convince your customers.

As most e-commerce operators offer various fee tiers, be clear about what your business needs. Buffer for growth by choosing an easily scalable platform that fits your business model. 

Navigate the regulatory landscape

As you take your business to the next level, be mindful of the regulatory landscape that may impact your investment and expansion plans. 

For example, you have a top-selling sauce in your café based on a family recipe, and you hope to manufacture and bottle it to target a larger audience.

To do so, you will need to navigate a different set of regulations pertinent to that plan.

Producing it yourself may require various food licences from the Singapore Food Agency, higher staff costs and related labour regulations. You will also need to decipher the nuances of food labels and expiry dates.

On the other hand, using a central kitchen or partnering a sauce making company with additional capacity may help to reduce the regulatory headaches. The only challenge left might be for you to figure out how to keep your sauce recipe a secret, and manage issues such as quality control.

Balancing the scales

Whichever it is – an F&B business, design firm, pet accessories or fashion business you own – you will need cash to run your business efficiently. For a complete picture of your cash flow, work out your profit as well as other factors including operational, investment and financing costs.

To build up your financial reserves, create and manage a detailed budget for all business expenses. Stay on top of your business’s total income and expenditures, including fixed, variable and additional costs. Scrutinise your cash flow results regularly, and review your expenses to see where you can save.

Greenlight your business future

Being an entrepreneur also means being able to seize opportunities when they arise. 

Utilising digital tools and upgrading one’s business strategy, just as chef Shakila Sham did, can help you realise your business’ growth potential. 

Ms Sham, founder of local restaurant Eatz19, highlighted that there was a need to digitise operations by partnering with delivery platform Grabfood due to lesser walk-in customers. She further invested in social marketing efforts via Facebook and Instagram and as a result now enjoys greater online customer engagement and improvement in sales.

Local streetwear label Flesh Imp has also successfully increased its business footprint after it sought funding from GrabFinance, which provides flexible, short-term financing options. According to Mr Nicholas Cho, managing director of Flesh Imp, “Grab has this process where things are streamlined and funds are disbursed fast, which is great for businesses.” 

The company received an order for $1.2 million worth of sales but with the loan in place, they were able to fulfil orders on time. More than that, this new cash flow meant that Mr Cho and fellow managing director Mr Vincent Quek was able to seize the opportunity to expand their business into China.

For SMEs like Eatz19 and Flesh Imp, digitising operations and fulfilling large orders do require an eye for timely investment. Traditional bank loans may be less than ideal when it comes to such opportunities. SMEs can simply apply online and access a GrabFinance funding. Interest rates can be as low as 0.7 per cent per month, and security deposits are not required.

Visit GrabFinance to find out more.

This content was produced in partnership with GrabFinance.

All information provided "as is” for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein.