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Small Business

Small and Medium Enterprises (SME), or commonly knowns as ‘ti business’ need to carefully manage their cashflow, revenue and expenses given their size.

Financial Literacy for SMEs – Things to consider

Have clearly defined financial goals and a business structure

Have clearly defined goals that are realistic and specific. Choose the Business Structure that fits your requirements. What works for a hairdresser won’t work for a shopkeeper.

Be financially literate

Learn how to manage your finance. Have a budget. When taking loans, be aware of your repayment capacity. Cultivate a habit of financial forecasting. Take into consideration annual tax returns, take tax planning advice if necessary.

Monitor your cash flow

Always track and monitor your spending. Everything you spend in a business impacts on your profits. Prioritise purchases to minimise costs. Have separate personal and business banking accounts. Manage your debt and cash flow.

Be insured

Protect your business. Have an insurance cover (e.g. fire, theft, calamities, etc.). It is always prudent to protect the business assets. Consider insurance covers for yourself and your staff.

Make your money grow

Try to maintain a cash reserve for at least six months and have a saving plan to cater for rainy days. Think about investing to make your money and business grow.

Be savvy / knowledgeable / informed

Read and understand your insurance and other contracts well. Avoid fraudulent activities. Ensure that the companies you deal with are regulated by competent authorities (e.g. FSC, BoM, etc.)

Setting long term financial goals

Today’s youth appear to be relatively savvy about money while some still consider that money management is not important.

Seeking advice before investing

You can consider enlisting the services of investment advisers before investing and ask them certain questions

Plan for your retirement

Retirement planning is simply planning and preparing for a future lifestyle to meet your goals, and financial obligations independently when you are a pensioner and are no longer working.