Midday with Howie Lim, Money FM 89.3

In a radio interview on MONEY FM 89.3’s Midday with Howie, our CEO and Co-founder Ajit Raikar, discussed the latest Validus-NUS Credit Brief and the outlook for Q3 and Q4 for Singapore SMEs. Here are key excerpts:

Important tips for SMEs in managing their finances well:

1. Know how much you have to borrow
2. Know how much you have to pay people
3. Don’t over leverage

Diversifying for growth

When SMEs do well and are looking for further growth and expansion, they tend to diversify. The key is to diversify into the right industry.

For example, SME A, who’s in the construction business decides to venture into F&B after hearing good things from the people around him. What he probably doesn’t know is that F&B sector has 70% mortality rates. This is the biggest risk you can put yourself and your company through.

What’s the definition of the right industry? Simple – don’t diversify into any industry that you don’t know enough about. Do your research thoroughly and leverage on your experience. Be overprepared.

Top priorities for today’s SME  include:

• Investing in productivity and productivity gains
• Use smart technology in the future
• Internationalising your operations (think about selling abroad, beyond our shores)
• Innovation; how can your business meet the needs of the customers of the future?

Tips to beat the recession

Recession is unavoidable, occurring every 5 – 7 years. On top of what has been said, every SME should also focus these on a daily basis in order to better prepare themselves for one in the future, such as:

• Be aware of and manage your debt service carefully
• Be prepared for the future; managing your cash flows well is crucial
• Take advantage of the support available through the various government grants, subsidies, schemes for their growth and future

Tune in to the podcast