BY KOH HUI THENG

WHILE the global economic recovery story is good news for businesses worldwide, the subsequent scaling back of some government-backed funding schemes today is a concern for small- and medium-sized enterprises (SMEs) in Singapore.

Over 13,000 companies - of which about nine in 10 were SMEs - have benefited from the roughly $8 billion of loans under the Special Risk-Sharing Initiative and enhanced business-financing schemes since December 2008, said the Ministry of Trade and Industry last month.

The schemes are being extended, but with revised terms, until the end of January next year.

my paper asked SME bosses who lack the resources and networks of big companies about the challenges ahead and the initiatives that would help their businesses.

CHALLENGES SMES FACE

Mr James Ong may be only 28, but as partner of frozen-yogurt chain Frolick, he is already a seasoned veteran of media interviews.

The head honcho ploughed in $100,000 in 2008 to set up his first kiosk at Holland Village with his partners, who were all Hwa Chong Junior College schoolmates.

The funds came partly from his own savings and partly from his parents.

"I didn't approach banks for a loan because I didn't think they would lend me the money. After all, I had no prior experience running a business," said Mr Ong.

Funding challenges aside, the fledgling businessman also had to apportion day-to-day responsibilities among the five stakeholders, keep costs low and ensure that they did not overspend.

Now, with five outlets under the Frolick name and one fewer partner, Mr Ong says some challenges have remained similar since day one. Growing the business and finding the right staff to man the branches are perennial concerns.

Having the right people with the right mindset and professionalism could push a company and brand even further, said Mr Melvin Seah, Hui Yee Coffee Manufacturer's key account manager.

Creating innovative and quality products to attract consumers is another challenge. "Getting support and funding from government agencies is essential (as this lets us become) aware of market movements, ensuring
that we maintain competitiveness to enhance business growth, both locally and overseas," he added.

Leveraging is the mantra the printing industry put into practice when 11 companies embarked on a study trip to South Korea's Paju Book City in October 2008.

While there, they learnt how to lower costs and generate revenue, and also stayed in touch with global trends.

Mr Thomas Chua, chairman and managing director of printing company Teck Wah Industrial Corporation, said: "It's about identifying pockets of opportunities and leveraging on one another's strengths."

BOSSES' WISH LIST FOR 2010

Collaboration among home- grown companies and the Government is something that Mr Andy Toh, managing director of watch company 25 Hours, hopes will bring dividends.

"Brand-consciousness is more prevalent in retail. Customers tend to think that imported companies and foreign brands are better, even though our quality is on par, if not better, than theirs," he explained.

A nation-wide initiative to endorse home-grown names as national brands, instead of current agency- led efforts, may help SMEs compete more effectively.

Malls can level the playing field by granting precious retail space to SME tenants both at home and abroad.

For example, Mr Toh suggested that CapitaLand extend invitations to existing tenants to set up shop in the developer's China malls.

For Mr Ong, more opportunities to interact with political and business leaders who have "been there and done that" is appreciated.

Rental rebates are also helpful. "Growing in terms of physical space is always very expensive for young businesses when their revenue is just starting to pick up," he said.

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