Difficult to sustain business in SG

Keeping the shop open is harder than setting it up
Business closure data suggests Singapore's business hygiene factor is not as strong

By Mindy Tan
JAN 1, 20165:50 AM
Singapore

SINGAPORE'S pro-business environment has been recognised around the world by entrepreneurs, putting it consistently in the top spots when it comes to places to set up shop. But data suggests that viability may be a cause for concern.

According to figures from the Department of Statistics, the number of companies that closed rose from 9,973 in 2008 to a high of 21,661 the following year. In 2010, the number fell to 14,359 before staying in the high teens through 2011 and 2014. In 2014, a total of 17,618 companies shuttered their doors.

On a macro level, it could, of course, be a byproduct of Singapore's shift away from traditional industries.

Points out Associate Professor Hooi Den Huan, director at Nanyang Technopreneurship Centre, Nanyang Technological University: "Sometimes with the changing landscape there could be new business opportunities, and certain businesses may no longer be as relevant. This could be why some companies decide to close down. Or, they may close down and move to other areas of opportunity. Or, some businesses may close down because they want to have a new brand name as an e-commerce company."

Ang Ser Keng, senior lecturer of finance at Singapore Management University's (SMU) Lee Kong Chian School of Business, points out that succession planning could be another factor resulting in businesses closing. "What's interesting is that a lot of businesses fold up not because they don't have a good business but because no one takes over," says Mr Ang. "If you look at succession trends in Asia, this is becoming more pronounced."

It is not just that businesses seem to find it more difficult to survive post-2011 than before. Says Victor Tay, member of the REACH Supervisory Panel: "The question is, among all the businesses that closed, which formed the larger percentage? SMEs are the one - they are more vulnerable, and it looks like a lot of them have under six years of operation, so they are experiencing earlier closure than others.

"This suggests that maybe Singapore's business hygiene factor is not so strong. Singapore may be called the easiest place to start a business but it is not necessarily the most easiest place to maintain a business."

Data from DP Information Group's annual SME Development Survey 2015 supports this observation. Of the 2,847 respondents that took part in the annual survey, only 10 per cent had been in existence for fewer than 10 years, compared to 38 per cent in 2012.

Indeed, the biggest drop was seen in the segment of businesses with between three and 10 years of operation - in the 2015 survey, only 9 per cent of respondents fell into this category, versus 21 per cent a year ago.

"This period - between three and 10 years - is the make or break period for SMEs. It is during this period that they will either become sustainable or fail. The drop in SMEs in this group suggest fewer SMEs are making it through this challenging period, where SMEs' operations goes beyond the initial startup phase and is tested on its scalability and sustainability," noted DP Information in its report.

Source --> http://www.businesstimes.com.sg/companies-markets/review-outlook-2015/keeping-the-shop-open-is-harder-than-setting-it-up

Why so difficult for new businesses to stay alive in SG?

how many coys make coys to wash money nia

wash finish, get PIC grant. close shop.

repeat again ~

Wash ah wash one ah ?

Need to be a GLC or have connections to have a chance.

You try to eat their market share, they fix you. How to survive?

If Uber is SG coy they will tio fix gaogao.

becos most sinkies secretly hope that u will fail