Business Guide: Here is the Top 10 Most Vulnerable and Affected Businesses in Singapore this 2021
Risks are inherent in the business world. There is the term “systematic risk”, which refers to the volatility of the overall market in finance. This risk cannot be mitigated or eliminated even by diversifying your investment prospects.
This reflects in actual business as inflation, changing consumer perspective, and natural disasters. Going into business means taking the risk that your business might get vulnerable from any of these circumstances.
Higher Risks With the Pandemic
The pandemic is one manifestation of the systematic risk that businesses take. Because of the pandemic, physical stores have to close, primarily to reduce the spreading of the virus, and secondarily because the lesser number of customers cannot support the business. The onset of the pandemic is one of the biggest nightmares of business owners.
Moreover, certain businesses and industries are more vulnerable to the effects of a pandemic than others. This is because the nature of their business would not grow without the normal physical activities of people. The following are the most affected businesses in Singapore.
1. Travel Industry
The impact of COVID-19 on the travel industry was disastrous. It forced the state to put up travel restrictions and so impeded what activity the industry depended on. Of course, the businesses under the sector have no choice but to put everyone’s welfare and safety this sector’s adverse effects first. And thus resulted in the temporary, others permanent, closure of travel enterprises.
Moreover, the state’s current strategy to alleviate the adverse effects in this sector is to encourage domestic travel. Authorities are enticing locals to visit tourist attractions within Singapore. This way, the travel industry’s revenues will surge back without compromising the people’s health.
Similar to businesses in the travel industry, airline companies rely on people’s physical presence to keep their business going. However, the dramatic drop in air travel passengers threatens some airlines’ existence. Airline revenues dropped by 90% in 2020, and few prospects are expected in 2021. The many jobs employed in these companies are also at stake.
Although the industry is taking measures to ensure long-term sustainability, its current predicament still makes things complicated. Airline companies have a lot of enduring to do. Once the economy and the situation get back to normal, they can look forward to regaining those dollars they lost. Airlines, although small, are essential in a state’s development and economy, so the industry is sure to bounce back after.
3. Aviation Industry (Manufacturing & Operations)
Restrictions in travel have resulted in a decrease in demand for aviation products. On the initial declaration of the pandemic, international and domestic flights are getting canceled all over the world. Afterward, travel was totally barred, and so the manufacture and operations of companies under the aviation industry were suspended, too.
Moreover, the industry also faced the cancellation of airplane orders from airline companies. These cancellations are expected to continue in the future even after the economy starts to restabilize. It will take time for the sector and its related sectors to get back on track.
4. Hotel Industry
The hospitality industry is one of the industries that cannot bring their operations online. Therefore, as long as there are restrictions in travel and mass gatherings, hotels will continue having a hard time. Hotels are therefore prompted to find ways of making their services safe to acquire.
Hotels will have to ensure that they comply and implement health protocols. Additionally, they also have to make sure that their facilities are clean and maintained. Singapore’s promotion of domestic travel is expected to improve the industry’s situation.
5. Arts, Entertainment & Recreation
The postponement of arts, entertainment, and other recreational activities was a big financial blow to the industry. Companies and people with stakes in the industry have lost millions in their investments in projects and events. And as these companies stressed handling such losses, their hundred thousand workers also worried about how to earn a living.
As of now, the industry can bring its productions online. Already, organizations worldwide are streaming their art exhibit, theater productions, and films via the internet. So long as mass gathering in closed spaces is high risk for virus spread, this is their viable direction.
6. Consumer Service
Another business that was greatly and negatively affected by the pandemic was consumer service. Clothing, shoes, cosmetics, construction, auto repairs, and the likes have lost their title as people’s must-haves. Instead, most have learned to rein in their spendings to secure their short-term survival.
Until now, the same is true. But most consumer service businesses are slowly starting to open again, now that there are vaccines and the protocols are working effectively. Many, those in retail, are also featuring their products online to acquire more exposure
7. Offline Retail
Offline retail is the physical front of retail businesses. Many of the retail companies in Singapore were still purely dependent on their earnings from walk-in transactions. So when the pandemic hit and people were encouraged to stay indoors, they had no choice but to wind down their operations.
Not only is the supply chain a challenge, but it is also hard because only a few can afford to acquire non-essential products. Moreover, others are doing their best to keep their businesses afloat by offering delivery and quick take-outs. Others also started posting their products and taking orders online.
8. Administrative & Support Services
With so many businesses facing difficulties, reducing the number of workers and staff was inevitable. Some companies cannot afford to employ so many people while the business was shaky, so administrative and support services were let go. Examples of these services include corporate secretarial, payroll, and HR services.
Companies who were adaptive enough to keep their businesses going compromised with making do with less staff and more limited capacity. And as some of these jobs can be done by one individual, people working in this industry lost their jobs. However, these same companies are also looking for more affordable alternatives, so talents still have opportunities to possess or acquire multi-tasking skills.
9. Traditional F&B
Traditional food and beverage refer to the regular setup where people visit physical stores to sit, eat and chat with family and friends. This setup, however, became a risky activity when the pandemic hit. People were discouraged from dining in, and so companies under this type of business suffered gravely. These companies lost their earnings on catering for events, parties, and celebrations. Thus, they were forced to reduce staff, and some even were disoriented from changes that they were forced to close down.
However, because food is essential, business owners need only explore strategies to survive the challenging times. For those who cannot afford their business establishment’s rent or lease continued offering their services from home, servicing within the neighborhood. Others also offered their food and beverage for take-out or through online orders.
10. MICE Industry
MICE industry refers to meetings, incentives, conferencing, and exhibition services. It brings professionals with distinct skills in pulling an event through. Or simply, they are event organizers.
However, because the pandemic essentially banned gatherings altogether, agencies and talents working for these events lost their livelihood. Unlike other businesses that you can transfer online to thrive, doing this to the MICE industry during a pandemic is nearly impossible. Until everything goes back to normal and face-to-face events are 100% safe, the industry will continue to lie low.
Innovative Solutions to Survive
The pandemic is indeed one true and obvious example of the risks entrepreneurs or business owners take. While other businesses have the capacity to survive amid this challenge, there are also others that cannot which need to be liquidated in Singapore. And although this is a grievous fact to face, it is the way of business.
One sure way to survive in today’s time is through technology and seek for business advisory in Singapore. Referring back to systematic risk, although it may not be mitigated by diversifying your investments, it can be through correct asset allocation. If your business is one of the businesses mentioned above, you may be pulling your hair out on how to pull through. Investing in the right technology may be the solution you are looking for.