New Ways for SMEs to Rebuild Their Business During the Pandemic

907,065 small and medium enterprises (SMEs) in Malaysia are living in very uncertain times. Businesses have barely hung on after the arrival of the pandemic. Entrepreneurs had to adapt by using technology to ensure the survival of their businesses. 

 

Surviving the pandemic

The chief economist of Bank Islam Malaysia Bhd, Mohd Afzanizam Abdul Rashid, said that SMEs must be aware on how to find help to enhance their business operation, sales and market segmentation. 

He also said that all SMEs should explore what assistance the relevant government agencies are providing and how it can help them transform their business efficiently. 

For example, Malaysia Digital Economy Corporation (MDEC) is providing matching grants of up to RM5,000 to SMEs to digitalise their businesses.

Mohd Afzanizam said that the pandemic had become a wake-up call for small businesses that threats to businesses could come in many ways and that it is crucial to prepare for changes and respond swiftly. 

He added that other than digitalisation and technological adoption, SMEs must be open to diversifying their revenue stream and explore other industries so they would not be too dependent on just one revenue source. 

He suggested that exploring for joint venture or partnering could safeguard the market share and gain operational efficiency. 

He explained further that research and development, and upskilling need time and money. According to him, SMEs are not convinced that these investments would help to protect them from future threats of heightened competition and economic shocks. 

The chief economist said that SMEs should constantly communicate with the relevant government agencies so they will have a clear view on how they should capitalise on available government measures and incentives.

He added that organising a workshop, conferences, and exhibitions would help to alleviate SMEs' concern or misconception about the need to upskill their businesses. 

Many businesses had to close down due to the pandemic.

Importance of cash management basics

HSBC Malaysia head of commercial banking, Andrew Sill, stated that SMEs should understand the basics of cash management. Basic principles such as preparing payments with the right value date, collecting receivables with real-time reconciliation and paying invoices on time would yield bigger benefits than saving money from having pricing discussions or negotiating tariffs.  

He said that once businesses have adjusted their approach to cash management, they will be better positioned to make informed decisions on whether they should take a loan to supplement their working capital or otherwise. 

He added that when SMEs have cash flexibility, they can pay suppliers faster and negotiate more favourable terms and rates. 

According to him, the solutions include:

• Receivables finance: A financing arrangement where one receives capital equivalent to the outstanding balances of invoices that have been billed but not yet settled. 

• Supply chain finance: A set of automated solutions that support more efficient transactions. It allows suppliers to approve invoices and access capital at a discount.

• Guarantees: One can issue them to help a company make a claim on non-payment of monies. 

 

WhyQ: Digitalising small businesses

In its mission to help SMEs accelerate in digitalising their business, a vendor digitalisation service platform, WhyQ had just expanded into the Malaysian market.

Its aim? To digitalise micro, small and medium enterprises (MSME) by providing modern and advanced solutions needed to run a business. 

The platform allows MSMEs to:

• Go online with their personalised e-stores,

• Track sales and expenses,

• Record debit and credit transactions via WhatsApp reminders, and 

• Reach out to customers via customised marketing tools. 

WhyQ plans to introduce WhyQ Mart that is scheduled to launch within the next few months as part of its many services to benefit their merchants. 

WhyQ Mart will allow merchants to connect directly to a list of different larger suppliers that they can personally choose to work with in a more convenient and systematic way. It will also allow them to order raw materials such as poultry and meat according to their needs from suppliers of a larger scale. 

WhyQ hopes to welcome 2000 local MSMEs onto their platform by the end of this month and 20,000 local merchants by the end of 2021.

 

Source: Bernama

 

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