Singapore’s small and medium businesses (SMBs) are demonstrating resilience and a focus on growth through digitalisation, despite facing economic pressures, according to a new report by Xero. The report, which surveyed over 500 owners and senior decision-makers from Singaporean SMBs, highlights the challenges and strategies these businesses are adopting in a challenging economic climate.
The report reveals that 61% of SMBs have been impacted by inflation and rising costs, whilst 48% face changes in consumer demand and 44% deal with labour shortages. Despite these hurdles, nearly two-thirds (63%) of SMBs reported revenue growth, with 77% increasing wages over the past year. Additionally, 47% of businesses expanded their workforce, primarily to support growth.
Koren Wines, Managing Director of Xero Asia, noted, “It’s exciting to see such strong optimism and momentum among Singapore’s SMBs, especially in a tough economic climate. Their continued investment in people and technology shows just how focused they are on building for the future.”
Operational challenges remain, with 91% of SMBs affected by late payments from customers. To mitigate this, businesses are strengthening credit terms, charging late fees, and offering discounts for early payments. Moreover, many SMBs struggle with real-time financial visibility, with 52% lacking access to real-time data and 49% finding it difficult to consolidate information.
Digital tools are seen as crucial, with 82% of SMBs prioritising digital adoption. A significant 99% of businesses view digital tools as essential, with many using digital marketing platforms, customer relationship management systems, and cloud-based accounting software to enhance operations.
Wines added, “Singaporean SMBs have shown a strong appetite for digitalisation—not just as a means to keep up, but as a deliberate strategy to drive growth and resilience.”
The report underscores the importance of digital tools in helping SMBs navigate economic uncertainty and prepare for future growth.
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