Four tips for SME survival during Hong Kong's fifth wave
The COVID-19 Omicron variant has swept through Hong Kong, severely impacting economic and social activity in the city. The government’s COVID-19 restrictions to battle the city’s worst outbreak have created workforce issues and financial woes for SMEs, raising uncertainty about the next few months.
Last month, the government laid out Budget 2022-2023 with relief measures to help local businesses survive and grow. Drawing on the latest government support and Xero’s small business trends, we want to share four tips on how SMEs can tackle Hong Kong’s fifth wave.
Tip# 1: Manage cash flow with better visibility
Cash-flow management is crucial for SMEs at any time, especially during the current crisis. Xero’s data revealed that more than half of SMEs globally are still anxious about how they’re going to pay their bills, and roughly 40% remain in cost-cutting mode. Debt remains a major concern for most businesses, and 56% still face cash-flow pressure.
The six-month rent relief for SMEs, announced in Hong Kong’s 2022-2023 Budget, can significantly benefit cash flow. The new measure will remove the pressure of rental expenditure, helping SMEs to get back on their feet or continue operating. Apart from external government support, technology solutions such as accounting platforms can provide SME owners with invaluable business insights to gain a holistic view of financial data, such as revenue and expense forecasts, and compare and analyse current and historical financial data to identify trends. Equipped with these insights, SMEs can better plan ahead and respond to potential changes and opportunities.
Tip #2 Join the ecommerce boom to expand your sales reach
Social distancing measures have prompted many retailers to embrace ecommerce, but those completely new to conducting transactions online might be experiencing teething problems. Setting up ecommerce systems and processes can be complex and time-consuming, with many small retail businesses finding it easier to tap into existing merchant service providers or marketplaces to expand their sales network and reach. Calculating fees and taxes for online sales can be confusing, making forecasting and managing cash flow tricky. The new round of HK$10,000 consumption vouchers is designed to stimulate spending offline and online, providing small businesses the opportunity to ramp up their ecommerce game if they want to reach new consumers online. Cloud accounting solutions can offer dashboards to help SMEs keep track of new sales and expenses to scale effectively and prepare for economic recovery.
Tip #3 Invest in digital marketing to boost your brand and drive leads
SMEs with an established digital presence are seeing profound results from doubling down on their digital marketing efforts to drive sales and brand awareness. SMEs with tight budgets and limited resources can start their digital marketing journey with approaches like SEO (Search Engine Optimisation) marketing to plan online content and leverage the right keywords to drive website traffic. SMEs with larger budgets can utilise SEM (Search Engine Marketing), a form of paid advertising that promotes their websites or services by increasing their visibility in search engine results pages.
Targeting the right audiences is key to digital marketing, and can deliver tangible results when used as part of a well-rounded marketing plan. There are plenty of good resources and tools available online, for example Google Ads and SEO tools for people who want to run their digital marketing campaigns. Marketing agencies or freelancers can help with more sophisticated campaigns.
Tip #4 Linking healthy minds to healthy businesses
According to Xero, 43% of small business owners worry about their mental health, and a similar proportion is concerned about their employees’ wellbeing. The pandemic has shown how important it is to put mental health and wellbeing first - a healthy business is a stronger, more productive business. SMEs can support their people’s wellbeing journey by offering work flexibility or mental health breaks, ensuring employees take time off, and setting clear boundaries between work and home. A culture of caring and wellbeing creates more resilient, productive and happy employees, allowing them to better cope with setbacks and contribute positively to the business.
Hong Kong might be experiencing its harshest pandemic wave yet, but we are confident that SMEs can overcome the challenges ahead with the proper steps and support.
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