Xero, the global small business platform, today released a study investigating how small and medium enterprises (SMEs) in key markets around the world have responded to COVID-19, revealing the challenges and resulting actions taken to reinvent themselves and thrive.
The commissioned study conducted by Forrester Consulting on behalf of Xero, “The Next Chapter For Small Business: How To Thrive In A Changed World”, surveyed over 1,000 SME owners and 1,000 SME customers across Australia, New Zealand, Singapore, the UK, the US and Canada, to provide insight on how businesses have survived and succeeded in the current environment, along with in depth interviews with SME owners.
Key findings reported by the study include:
“With a challenging economy and business environment ahead, SMEs in Singapore are at an important juncture,” said Kevin Fitzgerald, Managing Director for Asia at Xero. “Digitalisation of business operations coupled with generous government support has been a key enabler for many businesses through the peak of the pandemic and circuit breaker initiative. With government initiatives set to taper off over the coming months, there is growing urgency for SMEs to leverage data-based insights, adopt cloud-based digital tools and consult with trusted business advisors on strategy to build resilience and position themselves for growth.”
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Singapore SMEs are digitalising and leveraging data to inform their customer engagement and growth strategies
Cloud adoption surged during the pandemic as 62% of Singapore SMEs shifted their business operations online to more efficiently manage operations and better engage with customers. With an increase of 30% from 2019, Singapore saw the highest increase amongst all markets surveyed.
The study additionally found that SMEs in Singapore were more likely to leverage customer data analytics (37%)and less likely to rely on instinct to inform their strategy (20%). This is in contrast to their global peers who relied more on instinct (34%) than customer data analytics (27%). Leveraging data-driven insights enabled Singapore SMEs to quickly pivot their business strategy and tackle the top two challenges during COVID-19, namely retaining existing customers (38%) and attracting and retaining new customers (36%).
Businesses in Singapore were also more likely to base important decisions on customer feedback (43 %) and advice from business associations and communities (43%), with a smaller group relying on advice from trusted business advisors like accountants and bookkeepers (28%). Those who did consult business advisors, claim that it has been the most effective out of all initiatives measured, representing a missed opportunity for small businesses who did not.
Based on the findings, the study provides a playbook to help small businesses to build resilience and thrive in difficult times. Recommendations include harnessing the power of the ecosystems in which small businesses operate, digitising company and financial information and increasing efficiency with cloud-based tools and consistently leveraging the assets and capabilities within their networks to sustain and grow their businesses.
The study, including the full set of key recommendations from the Forrester study, can be downloaded from xero.com/the-next-chapter.