It is therefore vital that you take measures to hedge against exchange rate swings and get the best possible exchange rates. But how do you do so?

Spot Rate
Spot rate refers to the current price of one currency against another. The longer you give yourself time to arrange for the currency transfer, the higher the possibility of getting a better rate as you can wait for the better time to trade.
 

If you are expecting a profit from your foreign branch that is to be remitted to Singapore, and that SGD is likely to depreciate against the foreign currency, you may choose not to do anything. Transacting at the future spot rate will give you higher stated profit figures.
 
 
Forward Contracts
Forward contract is a non-standardised agreement between 2 parties to buy or sell agreed currencies at a specified time in the future. This is an effective way to hedge as it locks in an exchange rate today. It gives you a peace of mind that you will not be exposed to currency risks, should the currency move against you after you entered into the transaction.
 
Alternatively, you may engage in futures, which are standardised contracts traded on exchanges. Essentially both forwards and futures work in the same way.
 
 
Option Contracts
Likewise to forward contracts, options allow you to lock in a rate today for your future transactions. However, as the name suggests, options give you the right but not the obligation to exercise before or upon expiration. This is useful when you have uncertain future cash flows in a long-term outlook. Nonetheless, engaging in options will incur premiums, which translate into additional costs for your business.
 
Essentially, you will have to consider the pros and cons of each hedging instrument to determine the best fit for your business.

The post Currency Risks: How your business can hedge against potential losses? appeared first on Loyal Reliance.

Globalisation has exposed businesses to standard operational risks due to the increasingly volatile global economic and social climate. It is important for your company to recognise and prepare for unplanned events. Although being caught off-guard is a likely disadvantage, not having a plan would make any situation go from bad to worse. Thus, to achieve operational assurance during a crisis, an effective crisis management plan is needed.

 
 
Effective Crisis Management
An effective crisis management should include the following elements:

1) Create a Crisis Management Team (CMT)
A crisis team would prepare the crisis plan and regularly meet to update and test it. A suggested list for the crisis team includes the top management, operations personnel, public relations experts, legal assistance and insurance carriers. For small companies that do not have enough resources or personnel to form a crisis team, the owner(s) can form their own team.

2) Identify the possible issues
The crisis team should identify and list possible issues, starting with the most likely occurrence. Crisis issues can be manmade or natural. Manmade issues include violence, accidents, operator error, negligence, defective equipment, poor scheduling. While, natural issues include weather, natural disasters and contagious disease.

3) Develop a CMT plan
The primary objective of any plan is to set up a flexible structure that is capable of responding to any crisis quickly and decisively. The CMT plan should establish relationships and responsibilities. It should include a notification system with a specific and up-to-date list of current contact information on the team members, chain of command, outside relevant agencies.

4) Crisis Communications
Good communication is the heart of any crisis management plan. Crisis communications involves communicating with the media, local communities, police and government officials. Your company should establish a unified response, i.e. one spokesperson selected to respond to the various media.

5) Post-crisis Evaluation
The crisis management process does not end once a crisis has been resolved. Your company should look at the media coverage received, the resulting image of the company, short and long-term programs to rebuild image and review position statements for necessary revisions.
Only after your crisis management plan has been put to the test, can the crisis team evaluate its effectiveness. If your company has been fortunate enough not to experience a crisis, the crisis plan should still be constantly monitored to ensure that they are still relevant and no new issues have arisen. Your crisis management plan should be on-going and be constantly evaluated.

The post Decision Making in a Crisis appeared first on Loyal Reliance.

Click here to view more

The post LR SME Wire: Bringing your Business to New Heights with WSQ Framework appeared first on Loyal Reliance.

Encourage Malay/Muslim SMEs to explore overseas opportunities – That is one of the main encouragement for 3 sponsors of the upcoming Malay Muslim Business Conference 2013 (MMBC 2013) organized by the Singapore Malay Chamber of Commerce and Industry (SMCCI) with the assistance of the SME Centre@SMCCI and Berita Harian on 7th May 2013.

The 3 sponsors are Loyal Reliance Pte Ltd, a business consultancy company, Osim International , a lifestyle product company and the Iskandar Region Development Authority (IRDA).

The seminar, which will take place at Resorts World Sentosa Expo, is in its 2nd year and is supported by International Enterprise (IE) Singapore and funded by Spring Singapore.

This year’s seminar, entitled ‘Internationalisation of SMEs: Strategies and Opportunities’, will also be open to foreign participants.

 
Group Managing Director of Loyal Reliance Pte Ltd, Mr Jeffrey Koh, said that his firm is attracted to be part of the seminar as it is aligned with the company’s vision to encourage SMEs to seek opportunities outside of Singapore.

“MMBC 2013 will give plenty of attention to international business expansion and can open many opportunities for SMEs to venture new regional markets, especially in Malaysia, with the participation of other business owners from the region.”

 
“We also feel that SME business owners must be brave to venture and be exposed to the international market, in addition to hearing successful owners who are willing to share their experiences.”

 
“It is through these opportunities (MMBC 2013) that they can network with other business owners and work together with other firms.” said Mr Koh, who has a staff of 60 as well an office in Malaysia.

During the seminar, the 3 sponsors will be having a booth to showcase the services that they are offering.

Participants can also mingle with the speakers, who are successful business owners, both locally and from foreign countries.

CEO of Cathay Holdings, Mr Suhaimi Rafdi, is invited to be the keynote speaker of the event.

He will be sharing strategies based on his experience in developing and leading his company to the Middle East.

The seminar will also highlight other successful business leaders from Malaysia and Indonesia in the panel discussion, including Executive Chairman of Securiforce Malysia, Datuk Dr Maznah Hamid and Chairman, Executive Centre for Global Leadership (Indonesia), Bapak Dr Tanri Abeng.

Other topics include branding and strategic marketing for SMEs, successful business modeling, turning crisis into opportunities and international networking for the setting up and development for SMEs.

The post Loyal Reliance featured on Berita Harian 26th April 2013 appeared first on Loyal Reliance.

This grant assist SMEs to defray technology cost incurred along the way. There are namely 2 funding categories, Business Improvement and Business Transformation.
 

Under the Business Improvement Package, there are 2 solutions: Packaged and Customized. The Business Improve Package allows business owners to make multiple claims of up to 70%, capped at $20,000.

Packaged Solutions:
- Reimbursement of IDA approved solutions
- Up to date, there are more than 120 approved solutions including accounting, payroll and point-of-sales systems

 
Customized Solutions:
- Tailor made standalone and end-to-end solutions
- Complex solutions in areas such as customer relationship management and warehouse management system

The Business Transformation Package includes Integrated Customized Solutions. This is funding on a case-by-case basis and is not necessarily capped. However it is subjected to IDA’s review and approval whereby it includes:
- Manpower-related costs (for Project Manager in user company only)
- Consultancy Services
- Amortization of hardware and software
- Related training programs

Automate and streamline your business operations with iSPRINT. Loyal Reliance has assisted various clients with government incentives applications. ENQUIRE TODAY!

The post iSPRINT appeared first on Loyal Reliance.

It aims to advocate pro-family business practices as per the former assisting businesses to defray cost incurred from family friendly infrastructure costs and practices. Businesses are now able to claim up to $100, 000, a 25% increase from the previous scheme.
 
There is also an additional enhancement whereby businesses are able to reapply for the second time after a 5-year interval. This enhanced grant was introduced to better support Small and Medium-sized Enterprises (SMEs) according to the press release from the Ministry of Social and Family Development.
 
The Business for Family Council (BFC), supported by MSF was set up to assist businesses take on family-friendly business practices and infrastructures to meet the needs of families. Businesses are able to leech on the potential of the ‘family-oriented’ market. A survey conducted by BFC had demonstrated that families with young children and elderly have the benefit of enjoying returned patronage.
 
In line with the Government’s goal in making “Singapore the best place for families and children”, business owners who are looking into transforming their outlets to be more family-oriented should leverage on this grant.
 

The post FamilyMatters@Business – Enhancement of Business for Families Grant appeared first on Loyal Reliance.

With the increasing costs plus relatively stagnant price increments, it is to no surprise then that we have heard of businessmen lamenting on decreasing profit margins. This trend, if you can believe it, started way back since the 1970s. We can therefore say that businesses in Singapore, or the majority of them, have not seen significant improvements in their business models and approaches for more than 40 years!

Disappointingly however, you see a strong level of resistance and inertia towards change in business model by these business people, even when profit margins get reduced to perilously low levels. What do they resort to? Underpaying staff, delaying payments to suppliers, instead of focusing on improving business productivity – the root cause to their issues.
 
 
Be Accountable and Help Yourself, Before Expecting Help

Analysing the increased level of support by the government towards SMEs, one thing is clear – the government will only help SMEs who help themselves first, as mentioned by Minister Teo Ser Luck. Gone are the days that we as business owners can afford to waddle around in ignorance and expect some sort of miracle that business conditions can change for the better. Furthermore rising business costs is nothing new, it is time for us to be accountable to our own respective businesses. The necessary need to formulate, decide, and act on a plan.
 
 
Having a Realistic Timeline

With limited budget and capacity, so how does an SME go about starting off with a plan? It is to common belief that increasing productivity is an expensive process that would consume unrealistic amounts of financial resources. That might not be the case. The primary challenge more than anything is to overcome that mental block and inertia. Like how someone who has not been physically active being forced to run a marathon. It is tough, but given enough time, people and businesses alike can be progressively and systematically put through the motion, to upgrade towards a seemingly impossible goal.
 
Set a goal for your business, be it mechanization of business process or automation of your client relationship system (CRM), on a realistic timeline, break it down into smaller achievable parts and work upon it. The first step to changing will be your biggest.
 
 
Being Aware of Your Situation and Options

Once you get started on the productivity journey, an initial investment outlay is inevitable, but over a relatively short time part of these costs can be defrayed by various government schemes. SMEs must be aware of external options, which they can leverage on in order to reduce their financial burden during the initial phases, which includes how to build a solid fundamental relationship with their banking partners and identifying specific banking facilities to help them.
 
The Innovation & Capability Voucher (ICV) is an excellent program for SMEs to undertake consultancy projects for their companies as they have a $5,000 voucher to redeem. The Productivity Management and Financial Management projects under the program can really help SMEs diagnose their business conditions and kick start an effective cost management strategy within the companies.
 
A revised business plan would also be necessary to actively identify a business niche, be it in terms of a product, a target segment or even a marketing and branding approach. In the business world it is important to be relevantly different, and to innovate oneself accordingly in order to differentiate your company from your competitors.
 
With the Government setting aside $5.3 billion over 3 years for SMEs to upgrade themselves after the Budget 2013, business owners should ride on the productivity wave and fully utilize all the available assistance.

The post Coping with the Rising Cost appeared first on Loyal Reliance.

Here are three tips to align your business:

 
• Will your decision result in harm to your stakeholders?
• Will your decision cause social disharmony?
• Will your decision cause benefit at the expense of others?

If the answer is yes to any of the above, think twice. Business ethics can come in the form of how a small and medium enterprise (SME) owner applies aspects of business conduct, such as how they treat employees and suppliers to sales techniques and accounting practices. Business ethics is relevant both to the conduct of individuals and to the conduct of the organisation as a whole.

In embracing best practices where they make sense, SME owners and managers are able to distinguish their SME from the competition. They also have an incentive to adopt the discipline of responsible business conduct to create a wider commercial network.

Achieving a strong business ethics foundation
The overall goal of business ethics is that it is practiced consistently by everyone in the company. How can your people act ethically?

• Strong Leadership – traditional SME owners want to do everything by themselves, from selling, accounting to advertising. Proper empowering of employees will lead to continuous improvement and overall increase in motivation when trust is put into action by the leader.
 
• Proper book keeping – a “hands-on” approach to record keeping will remove doubt and questionable undertakings, plus it will demonstrate
the level of company progression.
 
•Fulfill customer requirements – having a powerful trust with all your customers will lead to a strong competitive advantage in your market
and will filter a positive image within your staff. Many companies make the mistake of only confronting unethical conduct once a crisis has arisen. A
reputation takes years to develop, but can be lost overnight following an ethical lapse.
 
• Broadcast an ethical company image – evaluate all your current marketing materials to ensure they are professional, clear and do not
misrepresent you.
 
• Get involved in the community – Larger companies call it Corporate Social Responsibility. For SMEs it means to embrace responsibility in the local community to encourage a positive impact through its activities to the public.
 
Business ethics, key to business growth and sustainability. SMEs must focus consistently on “doing the right thing.” It is good for staff morale to work in an open culture, with possible benefits of increased productivity and staff loyalty. These are vital in the current climate particularly in a high-pressure environment.
 
An organisation known for fairness is likely to attract high quality employees. Good relationships with customers based on a commitment to honesty and
transparency will enhance a company’s reputation and ensure the integrity of their supply chain.
 
Staff need support to do the right thing. Continuously enforcing ethical practices by offering training in solving ethical issues can help. Not only by giving practical tools, but also in coaching staff to issues and integrity risks which may arise. Decisions made by line managers or SME owners may affect individuals or entire communities.
 
Consumers today expect and demand integrity, honesty, and transparency at all levels of their environment. Understanding those expectations through training is critical to communicating core values and behavior not only to employees, but to society in general. This means by going above and beyond compliance so the outcome leads to a more positive reputation to enhance worth.
 
Creating an ethical business framework
The benefits in embarking on an ethics policy are increased productivity, higher staff motivation and a better level of service offering. Before embarking on a workplace ethics program, SME owners must identify what is to be accomplished from it and how well it will integrate into the organisation.
 
An effective ethics policy will also be based on a set of values. In SMEs, these values will inevitably be influenced by the personal and professional values and principles of the owner. The points below identify how a SME owner can analyse a potentially unethical situation and turn it into a positive one.
 
• Is the situation worthy of consideration?
• Who, what and how must be engaged in the process?
• How are ethical goals to be achieved – can specialised training be implemented or audit advice?
• What are the short, medium and long term goals to reduce unethical behaviour and increase awareness? At various stages in the process, the SME owner will
ask is the situation legal – does it violate any criminal laws, is it balanced – is this win-win situation for those directly involved? Is it right – most of us know the difference between right and wrong, but when the pressure is on, would you like others to know you made the decision you did?
 
A well-defined ethics policy provides the framework for ethical and moral behavior within your company. All employees should be made aware of the policy with effective communication, such as the commitments the organisation has made and the ethical behaviors that are expected of them as members of the organisation and how they can get support. Recognising the significance of business ethics as a tool for achieving business aims and setting objectives is only the beginning.
 
A small business that instills a culture of business ethics within its strategies and policies will be evident among customers.
 

The post SMEs & Business Ethics – Do they go hand in hand? appeared first on Loyal Reliance.

Local entrepreneurs and SMEs are increasingly seeking overseas expansion options to fuel growth. Local giants like Keppel Corporation “continue to believe their main interests is expansion within ASEAN especially with successful operations in the Philippines,” according to their CEO Choo Chiau Beng. However, Entrepreneurs and smaller entities on the other hand, have restricted resources, scarce networks, and limited budgets to initiate growth. When going global, they need to be convinced that they are doing the right thing and have an effective plan in place.

Why do companies expand overseas?

• Strong Singapore Brand overseas
In an article posted by CNA in 2011, “39 per cent of Singapore companies earn more than half of their sales income from overseas markets.” 3 The role of International Enterprise (IE) Singapore is to drive Singapore’s external economy through international trade. This is promoted by partnering Singapore based companies in their international expansion. This encourages those successful companies to invest overseas, have a good market understanding, the right people to manage overseas operations and build on the strength of foreign partners. To utilize the strong Singapore variety overseas an effective brand, design, and intellectual property and manpower strategies act as a key differentiator when competing in congested overseas markets.

• Cost benefits
To sustain any expansion strategy, improving the bottom-line may not always keep pace with the growth in revenue and sales as a result of new market entry. Finding the manpower with essential capabilities remains a key challenge in planning for expansion. Because of this top challenge, Singaporean businesses can choose to take advantage of lowering costs in other ways. For example they might move manufacturing plants closer to natural resources, invest in new and more efficient technology, or profit from tax structures. Expanding overseas also gives local firms the opportunity to extend product life cycles that may be entering decline.

• Diversify risk by increasing market penetration and size
Managing overseas operations and gaining the right business partners are some of the top challenges that Singapore companies face when internationalizing. Diversification of the customer base helps spread risks, and gives greater security in times of economic uncertainty. A recession in one country may not have a huge effect if the business is doing well in another country. Viewing diversification as a solution to market problems can be an unforeseen method of achieving growth. When businesses look into diversification to increase market penetration and size, they often see it as a way to mitigate the risks of the core business, by expanding into others. The Singapore market is limited by size and often sways the demand vs. supply equation. Opening up new markets overseas could rebalance and stabilize this equation.

The post Expansion Overseas: Why it is needed for enterprise to grow appeared first on Loyal Reliance.

 
Restructuring for quality growth will materialize and here are some key updates, which the SME community should be aware of.
 

Quality Growth Program: Aims to assist businesses upgrade, create better jobs and raise wages.

Increased Foreign Worker Levies: Levies will be increased cross board, so that businesses reduce dependency on foreign labor. Sectors, which highly depend on low skilled foreign manpower will be impacted the most.

Dependency Ratio Ceiling (DRC) Cuts: DRC refers to the maximum number of foreign workers companies can engage. Further selective DRC has been further cut.

Tightened eligibility for S Pass and Employment Pass: S Pass qualifying monthly salary has been increased from $2000 to $2200. A new salary system will also be implemented based on age and qualification of the applicant. Experience and older S pass applicants are required to meet the higher salary criteria.

Wage Credit Scheme: Government will co-fund 40% of salary increase for Singaporeans between YA2013-YA2015. This co-funding is applicable for Singaporeans earning up to $4000 monthly. Wage credits will be automatically credited to employers on a yearly basis.

Productivity & Innovation Credit Bonus: The PIC Bonus is an over and existing pay out to the current PIC scheme. Businesses that invest a minimum of $5000 with regards to PIC activities will receive a $1.60 to $1 matching cash bonus for the first $15,000.

Corporate Tax Rebate: A rebate of 30% of tax payable capped at $30,000 annually, YA2013-YA2015, will be made available to assist companies to cope with the rising cost.

Land Productivity Grant: This scheme is to support companies step up land usage in Singapore. Assistance will be provided for businesses that choose to relocate overseas, while keeping core operation in Singapore.

Linked up SMEs with research and technology partners: The collaboration will help to determine and develop productivity solutions in order for SMEs to possess a competitive edge.

Enhanced Partnerships for Capability Transformation (PACT) Scheme: Promote SME collaborations with large entities and facilitate co-innovation practices.

Integrated Construction and Precast Hubs: In order to stimulate prefabrication in construction, the government will put aside lands to enhance grants to encourage adoption.

Future of Manufacturing plan: $500 million had been set aside to strengthen Singapore’s leadership position in established clusters and set up new clusters.

Satellite Industry Development Fund: A $90 million fund had been set aside to support the satellite industry in Singapore.

The post Budget 2013 Updates appeared first on Loyal Reliance.