Bok Sing Hardware Paints, an SME which deals in hardware and machinery, has raised its revenue about 20 per cent.
To do so, it revamped its management processes, improved productivity, and enhanced its corporate profile overseas.
Between last December and March, it received business advisory assistance from SME Centre@SouthWest to address its business challenges.
In addition, by tapping on the government’s schemes for SMEs, Bok Sing has enjoyed cost savings.
For example, the company purchased an $80,000 inventory system that was integrated with a new point-of-sale system. However, it paid only 40 per cent of the total cost thanks to the government funding, which aims to help SMEs improve productivity.
The family-based retailer and wholesaler was able to do all this because the SME Centre@SouthWest gave it business directions.
The Jurong-based company started in 1976. “My father set up a hardware shop for me in Old Jurong Road,” recalled Mr Sanki Ng. “I was 20 and just out of the army. I had no experience at all. My father gave me $20,000 as start-up capital.”
Today, Bok Sing has two outlets, 30 employees and an annual turnover of around $5 million. It is still a family-run affair; Mr Ng’s wife and three children are involved in different areas of the business.
The big change came about because Mr Ng wanted to expand overseas. That was last year. He turned to the Singapore Manufacturing Federation (SMF), which put him in touch with the SME Centre@SouthWest.
The centre’s manager, Mr Raymond Wong, made several visits to Bok Sing to assess its business needs.
“Raymond told us about trade fairs organised by the SMF and IE (International Enterprise) Singapore that we could tag along with. He also told us about tax deductions, subsidies and assistance we could get for participating in a trade fair,” recalled Mr Ng.
It did not stop there. Mr Wong also introduced Bok Sing to various government funding support schemes it could tap to improve productivity and business processes. One was the Productivity and Innovation Credit (PIC) scheme; another, the Enhanced Innovation and Capability Voucher (Enhanced ICV).
PIC allows businesses to claim 400 per cent tax deductions for investments that increase productivity. ICV is a $5,000 voucher that SMEs can use to pay for consultancy services.
“A Business Excellence Consultant under the SPRING Singapore “SME Management Actions for Results” initiative whom we hired, taught us how to better manage the business. Their once-a-week course also covered what the management can do to bring in more revenue,” said Mr Ng.
“The consultant came many times to help us with paperwork and to study our business profitability. Lectures were also provided to my management and managerial staff. This has given us ideas for the business growth.”
Delivery drivers get a bonus per invoice they drop off now, which could mean more than $100 extra a month; retail staff are given commissions, which encourages them to work harder to close sales.
Meanwhile, those involved in industrial sales, who had commissions previously, get them only if they close a sale. They have also been set lower and more realistic sales targets.
“Previously, they would pass all the harder jobs to the manager. Now, with the incentives, they handle everything themselves.”
The new computerised inventory system has made it easier to find stock in the company’s two outlets and track suppliers’ prices.
Recently, Bok Sing attended its first trade fair abroad. The five-day event in Kuala Lumpur resulted in new customers.
“We knew that going out for exhibitions gives us exposure, but we couldn’t afford it. With subsidies, it’s not as expensive,” said Mr Ng. He added: “I feel more confident about our future.”
He is very grateful to the SME Centre@SouthWest, which he calls his “knowledge book”, and refers to it “whenever we need to know more about government support schemes for SMEs”.
SMES’ FOUR MAIN PROBLEMS
The SME Centre@SouthWest has provided business advisory services to close to 700 companies within the South West District, since it was set up in July 2013.
“There are many government support schemes around, but companies get overwhelmed, through the information is on the web. They still prefer talking to humans,” explained Mr Wong.
The most common enquiries he gets are about the PIC and ICV schemes, and whether a company can apply for both at the same time. (It can.)
Funds and advice are just two problems SMEs face, he noted. Another is Singapore’s tight labour market, which makes it difficult for them to find local workers.
Bok Sing was also introduced to SME Talent, an initiative by SPRING Singapore that helps local employers locate graduates from the Institute of Technical Education and the polytechnics.
A fourth common problem is out-of-date work processes.
“A lot of businesses have been around for 10 to 30 years. Their business model had not changed but the environment has.”
Mr Wong and his two business advisers usually meet SME owners at their place of business. This allows them to see for themselves the issues the companies face.
The centre helps all kinds of companies-including heartland shops with less than 10 employees, or micro-SMEs.
“Usually, such businesses are not keen on government support because they believe, ‘if the government gives me money, it’s not so easy’,” he said. “We tell them ‘This is how we do it’, and provide transparency to give them confidence.”
Source: “South West Community Development Council Publication BRIDGE”