Weblog -- Economics & Business -- Saturday, 3 May 2003
Saturday, 3 May 2003 -- True Entrepreneurship -- Singapore Companies & Economy in Trouble
The following points, which came from the editorial ( a.k.a. "leader" ) in the May 3, 2003 edition of the major English broadsheet in Singapore, i.e., The Straits Times, is -- IMHO (in my humble opinion) -- instructive, as Sherlock Holmes was wont to say:
- "Many home-grown businesses are hanging by a thread after suffering the longest, deepest slump ever experienced in Singapore. All around, the prognosis seems pitch-dark. ...
"This downturn has also helpfully underscored what the bottomline in business should be - profitability and sustainability. This is not to be confused with sales, headcount, public listings, number of outlets, media attention, entrepreneurship awards and other misleading benchmarks of success which crept in during the past two decades of runaway affluence and the dot.com-dazed days of the late 1990s. ...
"For too long here, size has been the measure of the man. This national obsession - 'How many people do you have?'; 'Is yours a listed company' - has forced many companies to hire ahead of time, increasing their cost line before their revenue line could improve. To keep up appearances, many also became overly enamoured of image and branding. They committed themselves to two-year leases of pricey showcase retail outlets and sent out glossy but money-losing magazines to customers every month. They became trapped in over-spending without the ability to stop - lest rumours fly. The initial public offering (IPO) was also for a long time conventionally deemed the target to shoot for. It pushed many a faltering firm into seeking premature listings. It also proved to be a systemic flaw because cashing out should not be the entrepreneur's ultimate goal. It should be building businesses.
"So it is timely that economic realities are now separating the wheat from the chaff among home-spun enterprises. There are entrepreneurs, and then there are entrepreneurs. There are the flippers hoping to off-load their firms on the stockmarket for a quick buck. There are those languishing in their third consecutive year of losses but who find it difficult to end their enterprise, partly because they are equipped for little else. Then there are the kind of entrepreneurs the Government really wants - the unsentimental yet committed, trail-blazing yet long-term builders who are resilient enough to stay the course. And the upside from this dark time of attrition is that it might actually produce the kind of sustainable, built-to-last enterprises Singapore really needs."
- One.99 Shop. "Before the award-winning retailer Nanz Chong-Komo and her One.99 Shop chain of discount stores went under recently, she warned that many more enterprises would soon bite the dust if nothing was done to help them. Her high-profile demise, which saw her sinking into $3 million debt and receivership subsequently, put a prominent face to the recent record number of bankruptcies here. ...
"To be sure, One.99 Shop was not the only business which reported impressive sales last year ($14 million) [ in 2002 ], while underplaying embarrassing losses ($700,000)." ...