What Should Singapore Business Owners Do During High Inflation Period?
Hello Business Owners!
As food prices and cost of goods are getting more expensive, do you find it challenging to survive your business? Don’t worry; we’ve got you covered. We’ve created a short video to share with you some pointers and suggestions on what you can do during this inflation period.
Before you start worrying, consider the following four pieces of advice to help you improve your business:
Keep Enough Cash on Hand
As the cost of food, gas, and transportation has soared, the government has raised interest rates to combat this inflation. As a result of this increase in interest rates, the cost of capital in the market will also rise. Therefore, having more cash on hand boosts your ability to make purchases at a lower price. For example, if you have more cash on hand, you have the option to pay in advance and receive early purchase discounts.
Hence, it is crucial and advantageous to retain enough cash on hand during this time.
Reduce Manpower Cost
You can aim to reduce your manpower costs, but how do you go about doing that? You can seek to hire overseas employees from neighboring nations with lower salary scales than Singapore’s, such as Malaysia, Indonesia, the Philippines, and Vietnam.
Besides employing foreign employees, you can also streamline your business’s internal process flow. Simply put, hire and/or cross-train your employees such that they are capable of performing a variety of tasks across different departments. In this way, your employees would be able to help one another out whenever necessary.
Build Higher Customer Retention Rate
As compared to acquiring new clients, it is more advantageous to focus on retaining your existing client base. This is because it is easier to speak to your current clients and you can trust them in terms of making payment. By focusing on your existing client base, you will also be able to reduce marketing costs and PR expenses.
Get a Business Loan
Within a few months, the temporary bridging loan with an interest rate of 4.5% to 5% per year will be removed, leaving you with either a working capital loan of 6% interest rate or 10% business term loan. As the interest rate will rise, it would be wise to take up the temporary bridging loan now while you still have the chance. As a business advisor, I would suggest that you secure a temporary bridging loan now while it’s still available. You are also able to use this temporary bridging loan to do a restructuring of your existing loans.
P.S. If you would like to find out more about restructuring of loans, you may click on the video link at the top of the video or here to understand more.
In conclusion, to obtain the upper hand, make sure you maintain and have access to a sufficient amount of cash. Internally, you should also make an effort to cut labour costs and streamline operations to improve the productivity of both your workforce and business operations. Lastly, we would suggest that you can take the temporary bridging loan if you can before it matures.
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