Many small business owners expected 2022 to be a year of recovery after two years of struggling to survive a global pandemic. But inflation, fears of a recession and a still unreliable supply chain all loom large threatening the growth of many small businesses in 2023. Southeast Asia is not exempted from the impact of the recession, with Singapore and Thailand the first countries most likely to be impacted if the US falls into a recession. We have provided a guide for SME’s to survive the economic uncertainty.
With the news of the economic downturn on the horizon, it is time for SMEs in Southeast Asia to prepare themselves and build up defences to come out of the situation stronger. SMEs being the backbone of Southeast Asia, can be vulnerable during an economic downturn as experienced during the COVID-19 pandemic. Fazz is here to help businesses of all sizes to weather the storm.
How to Survive Economic Uncertainty
Manage Cashflow and Minimise Uncertainties
Cash flow management is a top priority during an economic uncertainty. Review expenses, prioritise necessities such as paying employees and suppliers, and negotiate better payment terms with your suppliers where possible. This could be a tough task if your business relies on manual cashflow management system. Look for digital solutions that allow you to track down your expenses and all your transactions. An online business account can help you to get access to payment systems, fund transfers and credit options all in one account, making it easier to track all transactions. Cashflow management is the key for SMEs to survive the economic uncertainty.
Consider Alternative Financing Options
Consider alternative financing options, such as business loans or lines of credit, to ensure that your business has the cash flow it needs to stay afloat. Though, it may be difficult to get business loans from traditional banks, as they too are impacted by the economic down turn, SMEs can look to business financing offered by fintech. The alternative financing options offered by fintechs can get you access to quick injection of capital to keep your business afloat during the tough times with a reasonable interest rate.
Improve Operational Efficiency
Streamlining processes and reducing waste can help lower costs and improve profitability. Consider investing in technology, such as automation software, a cloud-based accounting system, and utilise payment solutions that does not eat into your revenue. Payment fees is one of the biggest waste that SMEs can experience. Opt in for payment solutions that does not have fees when sending or receiving payments, automatic payment reconciliation and that can allow you plug in to payment networks in your country to give more options to your customers.
Diversify Your Customer Base
Relying on a few key customers can leave your business vulnerable during an economic downturn. Diversifying your customer base can reduce the risk of losing significant revenue if one customer cuts back. This may involve expanding into new markets or seeking out new customers in your existing market.
Focus on Customer Service
Providing excellent customer service can help build customer loyalty and drive repeat business. Respond promptly to customer inquiries and concerns and consider offering promotions or discounts to retain customers. Emphasize the value you offer, such as a high level of expertise or exceptional customer service, and make it easy for customers to do business with you.
In conclusion, the impending economic uncertainty is a challenge that SMEs in Southeast Asia must prepare for. It is important for SMEs to be proactive and take advantage of the resources available to them, including technology and financing options, in order to thrive during an economic downturn.
Find Safe Harbour with Fazz
To help realise the guide SMEs to survive this economic uncertainty, business owners in Southeast Asia can find a safe harbour with Fazz. With Fazz, you can be confident with your business finances with Fazz business account. Save on your operational cost with our payment solutions, get access to cheap finances, and manage your cashflow all with no fees!
Open a Fazz Business Account to build, run, and grow your business with peace of mind today!