fbpx
Tips To Set Up Your Home-Based Business

Tips To Set Up Your Home-Based Business

Introduction

As the COVID-19 pandemic shook the world, many experienced workers started to have growing concerns on their job stability. Businesses have been forced to go digital rapidly, and the concept of renting a commercial office has lost its charm — even the most traditional of leaders have warmed up to the idea of remote working. Many professionals began steering their careers in a wholly different direction, embracing entrepreneurship as technology greatly lowered the barriers in starting a home-based business. If you are looking to set up a home-based office for your business, here are the six top tips to get yourself business-ready:

1. Apply for Relevant Permits and Licenses

Under the Home-Based Small Scale Business Scheme, certain businesses such as freelance writing, baking, sewing, hairdressing, and private tuition (up to three students at one time) are allowed to be carried out and does not require HDB’s approval. Such businesses should only function as an add-on to your income. No person outside the household may be employed.

For ACRA-registered firms providing services such as design, consultancy, technology-based / knowledge-intensive businesses and more, you may register to set up a home office in your private home or HDB flat as part of the Home Office Scheme. You will need to apply for a license under this scheme and may employ up to two non-resident employees (those who do not live at the address). Other criteria apply — for instance, you must continue to use the residential unit as your place of residence, and all business activities should be confined wholly within the premises.

Before you proceed, check here for the list of permissible and non-permissible businesses under the Home Office Scheme. If your business falls under the non-permissible category (such as any form of the retail business), your flat can only be used for business administrative purpose. In addition, customers are not allowed to visit your home office.

For businesses under both schemes above, there are a few guidelines to be followed:
• No physical and paid advertisements should be done
• No external business signboard is to be displayed
• No extraneous traffic is introduced to the place
• No noise, smoke, smell and other disturbances or danger caused to neighboring residents
• No loading and unloading of goods using vans and trucks
• All activities must comply with the regulations of other authorities (e.g. Singapore Food Agency)

Other than a general business license and home office permit, you may also need to apply for certain industry-specific business licenses. For example, some types of businesses will require a professional or trade licenses (e.g. Estate Agent License for buying or selling real estate).

If this is your first home-based business, you may choose to work with a local corporate service provider to ensure that your company meets all company compliance requirements in Singapore.

2. Prepare Your Work Space

Now that you’ve committed to doing effective work from home, start by setting up some ground rules and keeping yourself disciplined. Get your office supplies ready (think: stationery, writing pads, file organisers, a comfy chair, wrist support if you’re constantly on a laptop etc.) so you wouldn’t have to scramble to gather such resources when the need arises.

Keep things organised, and have a clear distinction between work and personal space. If you want to maximise productivity, you need to make sure that you can fully focus without succumbing to temptations like your bed, or getting distracted by endless entertainment options.

If space allows, set up your workspace somewhere other than your bedroom. Otherwise, demarcate a specific area in your room for your work desk — once you’re there, commit to completing your business objectives each day before “clocking out” and taking a good break.

3. Have a Clear Working Schedule

Communicate with your family and/or housemates on your business hours and work arrangements to avoid getting your business operations disrupted. Develop a structured routine and plan the bulk of your work during your most productive hours. By establishing the right expectations with others who co-share a space with you, you’ll be able to minimise any interference which can break your flow in completing fruitful and creative work.

Inform your clients and customers of your operating hours on your website, social media and any other communications. Let them know what to expect when it comes to communications outside of your working hours — you may also consider setting up auto-responders past business hours with information on when you can get back to them (e,g. within two business days) and how they can reach you on urgent matters if necessary.

4. Write Down Your Business Plan

Having a concrete action plan in black and white helps to maintain clarity of thought when day-to-day responsibilities hit you like a whirlwind. Decide on the purpose of your business, the persona of your ideal customers, and how exactly your business will generate income for you. Some key details to include are:

Executive Summary: Your company’s core business activities and organisational structure
Company Overview: The vision, mission, core values and scope of your business
Products and Services: What you offer and whom they are catered for
Market Analysis and Strategy: Your target audience and how you can build a competitive edge over others
Financial Overview: Budgets, forecasts, profit-and-loss analysis, and sales assumptions

This plan will serve as your guiding compass and roadmap for success, helping you to prioritise crucial business tasks and ensure that you are on track to achieve your business objectives within your projected timeframe.

5. Stay Connected Professionally

As more operate their businesses from home, some may tend to focus on internal business activities and lose touch on current business trends. To stay relevant and competitive, it is recommended to join business associations that organise virtual conferences and events to keep you updated on emerging challenges and the latest solutions and tools for your industry.

Maintaining a steady stream of income and clients may also be a concern for some home-based entrepreneurs, thus building a strong online presence (such as with a LinkedIn profile or Facebook page) will help to expand your network and introduce new prospects to your services without needing to step outside to solicit business.

6. Stay Connected Professionally

To ensure your business is sustainable in the long run, it is key to stay on top of your profits & losses, loan repayments, and other financial matters. Most income received or earned from trade, business, profession and/or vocation in Singapore are subjected to income tax.

Be sure to set up a separate bank account and credit card for your business and keep it separate from your personal expenses. Having a clear record of all business transactions and activities keeps your company compliant, should an audit be required for your home-based business. Use an IRAS-compliant accounting system to keep track of your business expenses and income, or employ a corporate services provider familiar with the business environment in Singapore to advise and/or manage your business accounts.

Conclusion

Mighty Glory Corporate Solutions is a virtual accounting practice that provides company incorporation, nominee directorship, corporate secretarial, bookkeeping, GST reporting, payroll management, business administration, financial reporting, corporate and individual tax services.

Check out our blog for more tips on running a business based in Singapore, or contact us here for comprehensive business support services.

As a gift to encourage / welcome new entrepreneurs, all new clients who connect with us and quote “HBB77” shall get a 15% discount on the first service package.

How Singapore’s Jobs Support Scheme Alleviates Your Business’s Covid-19 Pressures

How Singapore’s Jobs Support Scheme Alleviates Your Business’s Covid-19 Pressures

Introduction

First introduced under the Stabilisation and Support Package of Singapore’s Budget 2020, the Jobs Support Scheme (JSS) has been extended up to Sep 2021 to cover the hardest-hit industries. Support measures have also been enhanced to greater support businesses during the Phase 2 (Heightened Alert) [P2(HA)] period.

The JSS was designed to improve assurance and support to workers and businesses most affected by the COVID-19 crisis in this time of economic uncertainty. The initiative will provide cash flow support to local businesses, incentivise companies to retain local workers, and encourage firms to share productivity gains with its employees.

Under the Scheme, the Government will subsidise a percentage of the first $4,600 of gross monthly wages paid to local employees. The JSS payouts are intended to compensate and protect employee wages. The wage support scheme has three tiers as follows:

**Firms in the built environment such as construction companies will receive 75% wage support for wages paid from June to September 2020 only. Thereafter, they will receive up to 50% (Tier 2) wage support instead.

Below shows the computation of JSS payout for employees from three tiers and three different wage rates:

Jobs Support Scheme (JSS) FAQs

Who are qualified for JSS?

All employers (not in the Employer Exclusion List^) who made CPF contributions for local (Singaporean and PR) employees will qualify for the payout. Local shareholders and directors earning wages with mandatory CPF contributions are also qualified for the payout. However, business owners (sole proprietors or partners in partnership businesses) earning wages or trading in their personal capacity are not eligible for the payout.

Firms and businesses that cannot resume operations on June 2, 2020 are also eligible for the payout. To help the business, the government will provide 75% wage support until August 2020 or when they are allowed to operate, whichever comes first. Businesses under this category include gyms, cinemas, retail outlets, and recreational centres.

UPDATED: Under the P2(HA) enhanced JSS measures, businesses required to suspend many, if not all of their operations, will also receive JSS support of 50% for the period from 16 May 2021 to 13 June 2021. This applies to affected gyms, fitness studios, performing arts organisations, and arts education centres.

Certain sectors not required to suspend operations but are considerably affected by the tightened measures, like retail, cinemas and family entertainment centres, will also enjoy enhanced JSS support of 30% from 16 May 2021 to 13 June 2021.

Other businesses significantly affected by the tightened measures in P2(HA) may also appeal for enhanced JSS support at go.gov.sg/jss.

^ Employer Exclusion List

  1. Local government agencies including ministries and departments, organs of state, and statutory boards
  2. PA services and grassroot units
  3. Government and government-aided schools
  4. High commissions, trade offices, embassies, consulate
  5. Foreign military units
  6. Unregistered local/foreign entities
  7. Representative offices of foreign companies, foreign trade associations, foreign non-profit organisations, foreign chambers, foreign government agencies, and foreign law practices
  8. Bank representative offices, insurance representative offices and other financial representative offices registered with MAS (Monetary Authority of Singapore)
  9. News bureaus
  10. International organisations
  11. Entities paying CPF but are not registered in Singapore

How to apply for JSS payout?

Employers do not need to apply for the JSS payout. All employers (not in the Employer Exclusion List) who made CPF contributions for local employees will automatically qualify and will be notified of the support tier they qualify for and the amount they will receive. Businesses with CorpPass access can check their notification emails through the IRAS’s myTax Portal.

How will employers receive the payout?

JSS payouts will be credited through the following modes in order of priority:

  1. Credited to the employers’ GIRO bank account used for Income Tax or GST;
  2. For those without GIRO accounts, the JSS payout will be credited to their registered PayNow Corporate bank account
  3. Otherwise, the JSS payout will be made by cheque.

Employers who are still not using GIRO or PayNow Corporate are encouraged to sign up for these modes to receive their JSS payouts faster.

When are the scheduled payouts?

Employers would have received the JSS payouts in April, July, and October 2020. A special payout was released in May 2020 to support businesses during the circuit breaker by providing support in advance. Eligible sectors will also receive subsequent payouts in March, June, September and December 2021.

 

A Guide to Start Digital for Singapore SMEs

A Guide to Start Digital for Singapore SMEs

Introduction

The SMEs Go Digital programme was developed to help SMEs embrace digital transformation and maximise growth with the help of digital technologies. As part of this programme, support such as enhanced government grants, the Digital Resilience Bonus, SME Digital Tech Hub, Start Digital Packs and more have been introduced.

Spearheaded by the Infocomm Media Development Authority (IMDA), the Start Digital programme was launched in January 2019 and encourages SMEs to adopt digital business processes with comprehensive and low-cost digital solutions. The Start Digital Packs have since gained traction and support from banks, regulators, and SMEs in Singapore.

What is the Start Digital Pack?

A Start Digital Pack is an affordable and fully customisable digital business solutions package created under the government’s SMEs Go Digital programme. Recognised by most corporate service providers in Singapore, the easy-to-adopt and easy-to-deploy programmes and tools included in the package are designed specifically to address the needs of small and medium enterprises that are just starting up or transitioning to the digital scheme. An organisation can pick up the tools or systems they need to get a head start in digitalisation, building a stronger foundation for sustainable business growth.

What are the Benefits of the Start Digital Pack for SMEs?

Aside from the benefits of digitalisation, the Start Digital Pack provides SMEs with the following advantages:

Low Price – The Start Digital Pack includes standard business solutions available in the market but are offered at a much lower price. SMEs can take advantage of rebates and/or free months of access when they sign up. **Freebies will depend on the contract and will differ amongst different partners and providers.

Comprehensive Business Solutions – The Start Digital Pack offers a complete set of business solutions for all business needs. The pack includes programmes and tools on business Accounting and Bookkeeping, HR and Payroll, Digital Marketing, Digital Transactions, Sales and Inventory, Cybersecurity, and others.

Customisable Package – SMEs can pick and choose the programmes they need and leave out those that aren’t relevant to their business. Having the right solutions working for their organisation will help entrepreneurs streamline their processes, and focus more on satisfying their customers and growing the business.

Easy Transition to the Digital World – SMEs adopting the Start Digital Packs will also enjoy professional help and guidance that will ease their entry to digitalisation. Corporate service providers in Singapore can provide an array of relevant tech solutions and training to help businesses digitalise their operations.

Who can apply for a Start Digital Pack?

To qualify for the programme, the business must meet the following criteria:

  • Singapore registered and incorporated
  • At least 30% ownership is held by a Singapore citizen or permanent resident
  • Not more than $100 million in annual sales turnover, or not more than 200 employees

How can I apply for a Start Digital Pack for my business?

Qualified businesses can apply for a Start Digital Pack with any Start Digital Partner. Some of the already approved partners and vendors of the SMEs Go Digital Programme include DBS, OCBC, Maybank, UOB, Singtel, and M1. To apply, simply choose the partner (some partners may require the applicant to have an active account with them), customise your package, and then submit the registration form. When choosing the most suitable partner for your business, it is best to learn more about what the partner is offering and the details of the pack – the rates, the apps available and any help they are willing to extend to their clients.

Start Digital Pack Partners

OCBC and DBS banks are two of the first partners who join the Start Digital programme with great business solutions to offer:

OCBC – The OCBC Start Digital Pack has many digital business applications including accounting, marketing, HR, sales and procurement solutions. Its fully customisable solutions dashboard features are also integrated with e-commerce applications like Google Analytics, Mailchimp and Shopify. The dashboard is free to SMEs with OCBC accounts when they apply for a Start Digital Pack and subscribe to at least two solutions. The package also comes with a choice of two free apps upon sign up: Xero, Quickbooks, Mailchimp, or Shopify, for the first 12 months. Cash rebates are also offered in certain applications. To apply, simply send your account declaration and verification to your bank, choose the apps to purchase and start enjoying the benefits of digitalisation. 

DBS – An application for a DBS Start Digital Pack can be made online, with no need for qualified SMEs to physically go to the bank. Application is easily completed within 5 minutes and approval can be expected within 3 business days, when the client’s portal is ready for use. Open to new and existing customers, DBS offers web-based business tools that are designed to streamline processes, increase profitability and enhance business growth. DBS offers up to 18 months of free subscription to their featured solutions upon signing up with their Start Digital Packs.

Solutions under the Start Digital Pack

Start Digital offers a wide range of business solutions for users to choose from. Xero and Financio are two of the most popular business solutions amongst accounting firms in Singapore and Malaysia.

Xero – Xero is a top cloud-based accounting software with business tools integrations that include invoicing, time-tracking, reporting, payments, banking, HR and payroll, inventory, CRM, and bill/expenses management. The user-friendly accounting platform is popular for its groundbreaking and user-focused innovations. Our team at Mighty Glory Corporate Solutions, a certified Xero Advisor, can help you set up your Xero account for your corporate needs, walk you through implementation, and manage your account for you.

Financio – Financio is an all-round business solutions platform specially designed for small and medium businesses. Amongst its key integrations are business apps in invoicing, banking, HR and payroll, collaboration and reporting. Financio also features Lazada, one of the leading eCommerce platforms. The headache of manual stock counts is removed through the seamless synchronizing of price rates and inventory of your eCommerce business with Financio. As one of the pioneer Financio Advisors, we can help you set up your Financio account according to your business needs, implement its use, and manage it so that you can focus on other business priorities.

Conclusion

Connect with us today to know more about the Start Digital Pack! Our team can assist you to choose your partner, help you build your solutions package, and implement the solutions for your business needs. We look forward to helping you achieve your business goals with efficient and holistic solutions.

Differences Between A Business Name And A Trading Name

Differences Between A Business Name And A Trading Name

Introduction

Choosing between a business name and a trading name can be a daunting task. If you’re new to doing business in Singapore, you’re probably wondering which is cheaper or more effective for your brand.

Well, it depends.  Both business names and trading names have benefits and drawbacks, so each is suited to specific scenarios, as we shall learn in this article.

What Is A Business Name?

A business name is your enterprise’s legal name. It’s the official designation of the entity or individual that owns the company. It’s also the name you’ll put on government forms and business paperwork.

A business’s legal name may differ depending on its business structure. If the business entity is registered as a sole proprietorship, you may use the owner’s full name, i.e. Alan Khoo & Co. However, you can also use creative names like 8Eight8 Advisory Services, and so on.

Under a general partnership, an amalgam of the partners’ last names in the business’s legal name is quite common in Singapore. Private limited and exempt private limited companies usually have the suffix “Private Limited” or “Pte Ltd” in their legal names during the name application.

Unlike the other business entities, most legal names for corporations and limited liability companies do not include the names of their shareholders (or members). However, some countries will require these companies to include the term “Corporation” or “LLC” in their legal name, like New Technologies LLC.

Choosing and registering a business name

Your name is one of the first things prospective clients or customers will notice about your organization. It connects your prospects to your products and services. A good business name may not be all that’s required to make your business profitable, but it is a critical first step in that direction.

All companies incorporated in Singapore must have their names approved by ACRA. The process is a relatively simple online procedure that takes less than an hour on the Bizfile portal, provided that the applicant follows all relevant rules and regulations.

The Bizfile service will check your chosen name against its database to ensure that it hasn’t been taken. If it doesn’t find any matches, it will let you move on to the next step in the registration process – choosing a suffix.

Your suffix denotes your business structure, for example, PTE means you’re registering a Private Limited company; LLP means it’s a Limited Liability Partnership, and so on. You will need to choose the option that best suits your enterprise.

Note: Your preferred business name may be referred to the separate government agency for verification if it contains regulated business designations like legal, finance, school, or broker. This may extend the approval process to a few weeks.

If you’re planning on registering a company in Singapore, Mighty Glory Corporate Solutions is here to help.  Besides checking and reserving a company name for you, we will prepare all other critical documents needed to register your business.

What Is A Trading Name?

If you prefer to operate under a different identification from your company’s legal name, you may use a trading name instead.

A trading name does not require additional legal phrases or words (like LLC, Corp, and so on). For instance, a business’ trading name is Pinehurst, but their legal business name is Pinehurst LLC. An enterprise may choose to have their business name and trading name be the same.

Trading names are seldom displayed together with the business legal names since they are the names that the public sees but legal names are still required to be printed on majority of the documents for statutory purposes. Usually, business owners use trading names instead of their legal business names to assist in product branding that may help in attracting more customers.

Another common reason that businesses use trading names if they’re part of larger companies. A corporation may own several different companies that are independently managed. The corporation is registered under a formal business name, each sub-company gets a unique trading name to set it apart from the others.

The rules for registering a trading name vary between different countries. Some will require separate fees and applications for each trade name that are registered. You might want to check with your jurisdiction for more information regarding the trade name registration.

There are no filing requirements for trading names in Singapore. However, the applicants are required to disclose the underlying business registered name and unique entity number.

Using A Business Name Vs. A Trading Name

In most cases, a business will have both a legal name and trading name.  The legal one, as described above, must appear on all government forms and legal documents. The trading name usually appears on signages and advertisements. Whether you choose to use a trading name instead of a legal name is up to the business owner or the board of directors. Using a trading name comes with both disadvantages and disadvantages, as described below.

Benefits of using a trade name

  • It can be inexpensive to register a trade name. (In fact, there are hardly any requirements for it in Singapore).
  • It may give your enterprise more credibility
  • It enables you to differentiate your products

Disadvantages of using a trading name

  • You won’t have the exclusive rights to the name if you don’t apply for a trademark.
  • Your trademark will only be recognized in the jurisdiction where you registered.

Choosing Between A Legal Business Name And A Trading Name

Choosing between business name or trading name is an important decision, as it will affect your company in several ways. If you’re considering using a trading name instead of your business name, there are several factors that you will need to consider.

Your customers

Adopting a trading name after starting a business for a few years could be a wise choice, but it will likely confuse your existing customers. Be ready to address questions about why you’re using trade names and clearly communicate that your business will remain the same despite the change in name.

Your reputation

As a business owner, you have probably put a lot of effort into building a strong, reputable brand. If your customers can no longer recognize your brand due to a name change, adopting a trading name could diminish any rapport you’ve established over the years. Consequently, you should carefully assess whether the benefits of taking on a trade name are worth the potential disadvantages.

The cost

Before you start trading under a different name, you’ll need to ensure you have the resources to have it displayed everywhere it needs to be. This might require getting new signage, stationery, and/or editing your website and social media pages to show your new name. These changes come aren’t free, and the costs could be high.

You’ll need to carefully evaluate if you can afford to invest the money and time required to implement these changes. If your business is struggling to cover bills and other expenses, it may be unwise to invest in name changes until your revenues are more stable.

Legal protection

Once you register a trade name, other companies won’t be able to use it. However, this doesn’t mean that it’s fully legally protected. To do that, you will need a trademark. It allows you to:

  • Prosecute anyone legally who uses your name without your consent
  • Use the trademark symbol
  • License and sell your name

Conclusion

Trading names and business names are suited to specific situations. If your company has several product lines, adopting trading names will help you differentiate your offerings in the eyes of your customers.  On the other hand, if you’re offering a single product/service and have already built a reputation, adopting a trading name may hurt your brand.

Why Outsourced Accounting Services in Singapore Are Worth to Consider?

Why Outsourced Accounting Services in Singapore Are Worth to Consider?

Many start-ups and small business owners in Singapore are outsourcing their accounting duties to other firms. It might seem counter-intuitive: Why would a small business entrust another firm with their finances? However, there is wisdom in this practice. Outsourced accounting services might seem like an unnecessary expense, but the costs of hiring and maintaining an in-house accountant are far more.

There are many benefits to outsourced accounting services, especially in Singapore. The expertise and professionalism that comes with accounting firms make them reliable and trustworthy. In this article, we shall look at some of the positive outcomes of outsourced accounting services in Singapore.

When to Consider Outsourcing Your Accounting Duties?

Small businesses need to consider outsourcing their accounting function before hiring an in-house accountant. Here are some of the scenarios when outsourced accounting services work best:

  • A small business that doesn’t need an in-house accountant.
  • A company fails to find a suitable accountant at an affordable cost.
  • A growing business with the need for accounting services to meet changing financial needs.
  • Temporary assistance due to manpower constraint, for example, when the staff in charge is away for personal reason.

Benefits of Outsourced Accounting Services

Outsourced accounting service providers exhibit professionalism and expertise in financial matters. They offer a wide range of services, including bookkeeping, daily administrative support, payroll-related, managing accounts payable and accounts receivable, filing income tax returns, ECI (or Estimated Chargeable Income), and preparing other reports for special reasons. On the other hand, hiring an in-house accountant can lead to less accuracy and maybe even losses when it comes to misinterpretation of any financial laws.

Here are some of the benefits of outsourcing accounting services in Singapore:

No Need to Hire Full-time Accountant

Small business enterprises may not need to hire a full-time accountant for their firm. They deal with a limited volume of work, which means they can do without a fully paid accountant. That is why hiring outsourcing accounting services is a more feasible approach. With outsourcing, a firm can review their finances and periodically plan for the future, while freeing up time to create new business strategies.

Cost Savings

Setting up a company in Singapore and maintaining it require a lot of work – not to mention that it is very costly. Outsourcing might seem like an expensive venture, but you’d be surprised to learn that outsourcing saves a lot of money in the long run. Outsourced accounting services reduce expenses, usually attributed to a full-time employee. It removes the need to pay the salaries, bonuses, pension or levies, and other benefits for an accountant. With outsourcing, you only pay for accounting services, nothing extra. You get better quality services for less money than it would take to hire and maintain a full-time employee. There is no loss in productivity that usually affects employees in a company.

Expertise

Outsourced accounting services provide the option of hiring professional accountants with high levels of expertise at an affordable price. Small businesses in Singapore can benefit from a team of highly qualified accountants who provide integrity and deliver work on time. Accounting services make sure to cope in a competitive market by continually improving their qualifications and skills. These are all readily available to companies should they choose to outsource their accountants. Moreover, external auditors do a better job of reducing errors in their work – considering that they may lose a contract if they mess up.

Accuracy

When it comes to outsourced accounting services, the margin of error reduces significantly. Accounting firms will usually utilize accounting automation software to save time. Using accounting software reduces the amount of time spent in preparing tax returns, tracking expenses, and producing financial reports. In addition to saving time, automation reduces the number of human errors. Using Optical Character Recognition (OCR) and Artificial Intelligence (AI) result in a high level of accuracy.

Scalability

When it comes to outsourced accounting services, one of the most significant benefits lies in the ease with which the business can expand without requiring any additional employees. Most accounting firms in Singapore can accommodate small to large corporate sizes when it comes to accounting services. If a business gets a sudden growth in its finances, there will be no requirement to hire extra accountants. The outsourced accounting service will step up to the job without any lags.

Conclusion

Taking accounting into your own hands may not be the most feasible option in the current Singapore’s economic climate. Businesses and start-ups are popping up all over the country, and starting up a business is no easy feat. Consider the following: registering a business, preparing all the documentations required under the Companies Act, getting licenses and permits, and registering for Goods and Services Tax (GST). These are time-consuming tasks that cannot be done by a single individual. That is why outsourced accounting services are so prevalent in Singapore today.

Connect with us today to get a suitable package under our accounting services for your business in Singapore.

Challenges that e-Commerce Brings to Retailers: 7 Tips on Navigating Change

Challenges that e-Commerce Brings to Retailers: 7 Tips on Navigating Change

Introduction

On 30 October 2020, one of Singapore’s biggest names in retail announced its closure. Robinsons will be closing its last two stores in Singapore: its flagship store at The Heeren, and its 85,000 sq ft department store in Raffles City Shopping Centre. Robinsons Singapore has long been a fixture in the city, being in operation for 162 years. More than a business, the well-loved brand has been a huge part of Singapore, creating traditions and evolving through the times with the society it serves. The announcement sent shockwaves around the city, but it was imminent for retail giant Robinsons, which has seen over six years of operational losses.

End of an Era

The first Robinsons store opened in 1858, functioning mainly as a grocery store. By 1957, it has established prominence and became renowned all through the Far East. The conglomerate also stood through unfortunate disasters – its Raffles Chambers store was bombed during World War II, and the store was razed by a massive fire in 1972, with nine people left dead in the blaze.

In the 2000s, the company started to expand and restructure. A new $30 million store opened in Raffles City and from 2006 to 2008, the company went through changes in ownership, with Indonesia’s Lippo Group, and the Al-Futtaim Group of Dubai holding stakes in the company. In 2013, the new flagship store at The Heeren was opened.

In a bid to boost its decreasing sales, Robinsons launched its e-commerce platform in 2016. However, the shrinking demand for retail renting and the shift of shopping preferences from brick-and-mortar stores to virtual continued to plague the company. The COVID-19 epidemic and its economic repercussions proved to be the nail in the coffin for Robinsons. The former shopping giant in Singapore is closing down.

Why is e-Commerce the Biggest Challenge for Traditional Retailers?

Although many were saddened by it, the closure of Robinsons did not come as a total surprise. Physical retailers from all over the world are closing down. Giant brands like Walmart, JCPenney, Neiman Marcus, Forever 21, and Sears have all closed shops. The convenience and accessibility of online shopping have caused a massive shift in buying behaviours and a fast-dropping demand for brick-and-mortar shops, shopping malls, and department stores.

The changing retail landscape removed stores and physical outlets from the equation. eCommerce opened a new dimension in shopping, one that is preferred by most consumers today. Here are five major advantages of e-Commerce that are plaguing department store retailers:

1. Online platforms are cheaper

Setting up and maintaining an online store is a lot cheaper than a brick-and-mortar outlet. The costs of building a website and an online store are just a fraction of the costs of constructing, decorating, and putting together a brick-and-mortar shop. Overhead costs are also lowered as less staff are required to man an online shop, compared to a physical one. No rent, electricity, and water bills!

2. Sellers can set up their own shops

Anyone can easily set up their own online shop or hire an outsourcing firm in Singapore to build one for them. This convenience gives the sellers an option to go directly to their customers, thus effectively lowering costs and increasing profitability. The low barriers for new retailers to set up virtual stores further decreased the need for sellers to rent retail spaces in physical departmental stores.

3. Shopping is more convenient

Convenience and accessibility of online shopping tipped buyers and customers to favour the virtual stores. Multiple payment options give buyers the flexibility and ease of shopping. The remote and cashless transactions afforded by e-Commerce resolved many shopping problems during the pandemic with its lockdowns and travel restrictions.

4. Operations are streamlined

No more restocking of shelves, cash handling, keeping the store neat and tidy, price tagging, holiday staffing, and tiresome inventory monitoring. With e-Commerce, everything is automated, thus, operations are fast, simple, and efficient.

5. Round-the-clock operations and worldwide reach

As consumers flock online, shopping becomes something that can be done around the clock as there are no fixed operating hours for online stores. You continue selling while you and your staff are asleep, at a meeting, or on vacation. You are also maximising your reach as you can now sell to anyone around the world.

How can Retailers Overcome the Threats of e-Commerce?

The overwhelming edge that e-Commerce offers to consumers is proving to be a threat to retailers – one that has reduced many big names and retail brands to bankruptcy. As many welcomed the convenience and accessibility of shopping online, not all retailers are adaptive enough to accommodate the change. Thus, many of them are rapidly losing customers and losing the business.

Change is always a tumultuous stage. But, oftentimes, it is the only option we have if we are to survive the evolution and stay in business. Here are some tips that could help business organisations weather the threats of e-Commerce and the massive disruption it has brought to the business industry.

1. Embrace change

The best way to overcome the threat of e-Commerce is to embrace it. Recognise its advantages and apply them to your organisation. Launching an online store will significantly widen your client base, give your current customers more options, and increase revenue. Expand your reach and operations by establishing an online presence, on top of your brick-and-mortar stores.

Take advantage of government grants such as the Digital Resilience Bonus, where you can receive up to $10,000 for adopting digital solutions in accounting, HR/payroll, inventory management, data analytics, e-Commerce, e-Procurement, food ordering and delivery. Enterprise Singapore (ESG) also provides a 90% support on qualifying costs (capped at $9,000) for retailers looking to list their products for sale online via one of four e-Commerce platforms providers: Amazon, Shopee, Qoo10 and Lazada Singapore. For those unfamiliar with the grant applications, support can be found in SME Centres, or you can opt to work with a corporate service provider in Singapore with proven experience in helping businesses go digital effectively.

2. Highlight your brand

What makes your store or shop unique? What brings people in? Is it the family-friendly ambience of the store? The trendy and fashionable selection of goods? Is it the little extras in the services you offer? Remind people of why they love your store. Highlight your brand and provide the special shopping experience that only you can provide, whether it’s online or offline.

3. Improve your response time

Whether you add a virtual store to your mix or not, it is important to strengthen your customer engagement. e-Commerce has spoilt shoppers with the expectation of instant gratification. People are no longer willing to wait. Prioritise your customer service responsiveness, whether is it answering queries, addressing complaints, and delivering goods. Make sure you provide your customers with what they need, as soon as possible. Empower your customer service team by allocating more human resources to provide personalised support to your customers, while outsourcing administrative tasks such as by engaging accounting firms in Singapore to streamline other parts of your business operations.

Platform responsiveness is also important – Recapture your sales lost to slow or unresponsive webpages by doing regular checks on your site speed and optimising webpage loading times. Work with an outsourced web agency or business consultant who can help to accelerate your business digitalisation.

4. Study your competitors

In the changing business climate, take a closer look at how your competitors are doing. They are your best sources of information and guidance on how to navigate this crucial stage. For the old-timers that have retained their stature, what changes have they adopted? What practices have they retained? For the newcomers, what are they doing right? What is their edge? For those who failed – where did they fail? Learn from these lessons and make use of data and statistics to inform your business strategy and decisions.

5. Bank on customer loyalty

You can alienate loyal customers by changing or not changing at all. The key to securing their loyalty is to know your customers. Conducting a survey or doing interviews will give you a good idea of how they stand on accepting changes. Age, location, social standing, and income range of your target audience are just some of the factors to consider when deciding whether or not to make the change.

6. Invest in a secure platform

Online security is fundamental to any virtual store or website. Ensuring the security of your customers’ information is also a company compliance requirement in Singapore. People are aware and are just too afraid of scams, frauds, and other cybercrimes that are pervasive on the internet. If you are making the move to e-Commerce, make sure that you are building a secure environment for you and your customers, be it via ensuring personal data protection, or using trusted and secure payment gateways.

7. Innovate your marketing plan

The internet has evolved from a connectivity tool into a place where people socialise, communicate, work, and shop. Your current marketing strategy may no longer be the most efficient to reach your target market. Television viewing is on the decline, newspapers are all but phased out, and local radio stations are no longer the primary music source of the masses. Study where you can reach your customers at the present, reassess if your marketing strategies still apply, and make the necessary changes.

Conclusion

Need support to take on the challenges of the digital age for your business? We offer comprehensive business and accounting services in Singapore. Connect with us today to discuss more of your company compliance requirements in Singapore. We look forward to helping you identify your business needs and providing you with efficient and holistic solutions.