Top 5 Commercial Skills Upon Business Takeover in Singapore

For many individuals, the allure of business ownership in Singapore is high. A vibrant economy, stable political landscape, and a pro-business environment makes it an attractive proposition for both local and overseas investors seeking acquisition opportunities.

For many corporate executives, buying a business in Singapore offers an alternative from an increasingly uncertain corporate environment. Plus you get a shot at financial freedom too! Sounds sexy, isn’t it?

However, to successfully navigate a business takeover and steer it towards continued prosperity requires more than just projected growth on an excel spreadsheet. It demands a specific set of commercial skills to ensure a smooth transition and to unlock the full potential of your new venture.

Based on our experience as a Singapore business broker, we've identified the top 5 commercial skills that are crucial for investors upon business takeover in Singapore:

1. Strategic Vision and Adaptability:

The business you acquire, while possessing its existing strengths, typically operate within the Singapore market 80% of the time. Consumer preferences evolve, technological disruption, market sentiment changes, plus new entrants coming into the market. As the new business owner, you must possess a clear strategic vision for the future of the business. This involves:

• Market Analysis: Assessing the market landscape, identifying emerging trends, and understanding the competitive environment. Key questions to ask: Are there new customer segments to target? Are there evolving regulatory requirements to consider?

  
  

• SWOT Analysis: Conducting a thorough Strengths, Weaknesses, Opportunities, and Threats analysis of the acquired business in its new context. This will help you identify areas for immediate improvement and long-term growth.

  
  

• Adaptability: Being agile and willing to adjust your strategic direction based on market feedback and unforeseen challenges. The initial business model may need tweaking or even a significant pivot to thrive in the long run. For instance, a traditional brick-and-mortar retail business might need to rapidly enhance its online presence to capture the mature mobile digital market in Singapore.

  
  

Without a clear strategic vision and the ability to adapt, the acquired business risks stagnation or becoming irrelevant in the fast-paced Singapore market.

A good example is the completion of The Rapid Transit System (RTS) Link by end 2026. How would it affect the retail and F&B businesses in Singapore? Which segment of the consumer market would be impacted  by it? Are there any specific geographical location of businesses in Singapore that needs to pay particular attention to this development?

Another example is the recent tariff introduced by Trump administration. You can imagine the impact it will have on export businesses, especially if the business has their manufacturing base in China and export directly to the US.

Next Article: 6 Reasons Why People Buy Business in Singapore

2. Effective Stakeholder Management:

A business takeover impacts various stakeholders, both internal and external. It’s common for business takeover to flop due to post integration failure. Successfully navigating these relationships is paramount for a smooth transition and long-term success. Key aspects of stakeholder management include:

• Employee Engagement: The existing employees are the backbone of the business. Clear and transparent communication about the takeover, their roles, and the future vision is crucial to alleviate anxieties and retain valuable talent.

  Holding team meetings, conducting one-to-one discussions, and demonstrating empathy can go a long way in fostering trust and loyalty.

  Pro-tip: It’s common to offer financial incentive and promotion opportunities to retain key talents.

• Customer Relations: Maintaining and nurturing existing customer relationships is vital. Reassure customers about the continuity of service and highlight any potential improvements or benefits under the new ownership.

  
  

  Personalised communication and proactive engagement can strengthen customer loyalty. For example, visiting customers in person and having meals together is an effective way to establish relationship.

  
  

• Supplier Management: Establishing strong relationships with key suppliers is essential for a stable supply chain. Clearly communicate the change in ownership and ensure a smooth transition in procurement processes.  Exploring opportunities for mutually beneficial partnerships can lead to cost efficiencies and improved quality.

  
  

  Pro-tip: It’s recommended not to change suppliers in the first 12 months upon business takeover.

  
  

• Investor Relations (if applicable): If the acquisition involves external investors, maintaining open and transparent communication regarding the business performance and future plans is crucial for building and sustaining their confidence.

  
  

  Pro-tip: A good practice is to provide regular update to your investors. It could be a monthly, quarterly or even semi-annual report. Consistency and transparency is the key.
  

Neglecting stakeholder management can lead to employee attrition, customer churn, supply chain disruptions, and legal complications, all of which can significantly hinder the success of the post-acquisition integration process.

3. Financial Acumen and Resource Allocation:

While you've likely conducted thorough due diligence before the acquisition, effective financial management post-takeover is critical. This involves:

• Cash Flow Management: Closely monitoring and anticipate the cash flow need of the business during the transition and subsequent expansionary phase.

  
  

  Ensuring sufficient liquidity to cover operational expenses and potential unforeseen costs is paramount. Implementing robust financial controls and forecasting future cash flows are essential. Pro-tip: A good practice is to set aside 20% - 30% of the purchase value for cash flow need during the transition phase.

  
  

• Budgeting and Cost Control: Developing realistic budgets and implementing effective cost control measures to optimize profitability. Identifying areas where efficiencies can be gained without compromising quality or service is crucial.

  
  

  For instance, renegotiating supplier contracts or streamlining operational processes can lead to significant cost savings. Perhaps you can even adopt zero-based accounting in the second year onwards. Kraft Heinz is particularly famous for its successful implementation of zero-based accounting under the influence of 3G Capital.

  
  

• Performance Monitoring: Establishing key performance indicators (KPIs) or objectives and key results (OKRs) to track the progress of the business and identify areas that require attention. Regularly reviewing financial statements and operational data will provide valuable insights into the health of the business.

  
  

  Pro-tip: Popular tools used to track KPIs and OKRs include Asana, Notion, Trello and Monday.com

  
  

• Strategic Investment: Making informed decisions about reinvesting profits back into the business for growth and expansion. This could involve upgrading technology, developing new products or services, entering new markets or even hiring key talents.

  
  

  Pro-tip: Sound financial acumen and prudent resource allocation are essential for ensuring the long-term financial stability and growth of the acquired business. If corporate finance is not your strength, you can consider hiring a fractional CFO / consultant.

4. Sales and Revenue Growth

Sales is the lifeline of any business. For B2B business in the SME (small medium enterprise) segment, the owners are typically involve in sale process. As the owner, possessing sales experience is crucial especially if the acquired business does not allow you the financial bandwidth to hire an experienced sales professional.

Pro-tip: If you do not have sales background or uncomfortable doing sales, you might want to reconsider acquiring a B2B business with an enterprise value of <$3 million.

• Source of Lead: Evaluate the current sources of lead, and explore new channels. This can potentially increase your deal pipeline and lower your customer acquisition cost. (CAC) Common sources of leads includes: Exhibition, workshop, social media advertisement, cold-calling, referral, content marketing, etc.

  
  

• Sales Hire: Unproductive sales hire can be a dead weight to an organization, affects the team morale and cause high performer(s) to leave the organization. Having an effective means of evaluating individual performance, and knowing how to manage sales folk can have a direct impact on revenue.

  
  

• Customer Profile: Understanding your customers’ profile, allows you to execute your marketing plan effectively and increase the ROI of your marketing budget. One way of knowing your customer better is to meet them face to face. If this is not possible, the second best way is to have a call with them. Nothing beats direct interaction with customers.

  
  

• Sales Cycle: For B2C businesses, sales cycle tend to be short especially when the purchase value is < SGD $100. However for B2B businesses, understanding the time taken to close the deal and conversion ratio can make or break your business. It’s common for enterprise market to have a significantly longer sales cycle, compared to SME market.

Pro-tip: In today’s market, using CRM tool such as HubSpot or Salesforce is essential. It provides you with insight on your company sales activities. Normally when buyers are looking to buy a business in Singapore, it’s common for them to access into the company CRM or ERP system as part of the due diligence.

Next Article: 10 Effective Ways to Increase Sales for Your Business!

5. Operational Efficiency and Process Optimization:

Identifying and implementing improvements in the operational processes of the acquired business can lead to increased efficiency, reduced costs, and improved customer satisfaction. This requires:

• Process Mapping: Understanding and documenting the existing operational workflows to identify bottlenecks and areas for improvement. Visualizing the processes can help pinpoint inefficiencies. A simple flow chart can provide clarity in an effective manner.

  
  

• Technology Adoption: Leveraging technology to automate tasks, streamline processes, and improve communication. Singapore has a strong digital infrastructure, and embracing relevant technologies can provide a significant competitive advantage. For example, adopting cloud-based accounting software or implementing payroll system can improve efficiency.

  
  

  Pro-tip: Singapore based companies can access to Productivity Solution Grants (PSG) under Enterprise Singapore for financial support.

  
  

• Quality Control: Implementing robust quality control measures to ensure consistent product or service delivery. This is crucial for maintaining customer satisfaction and building a strong brand reputation in Singapore.

  
  

  An example is the usage of 3rd party inspection company. This is a common practice among manufacturing business in China. Some of the well-known 3rd party inspection companies includes QIMA and TESTCOO.

  
  

• Supply Chain Optimization: Analysing and optimizing the supply chain to reduce lead times, minimize costs, and improve responsiveness. This might involve exploring alternative suppliers or implementing more efficient logistics solutions.

Improving operational efficiency not only boosts profitability but also enhances the overall competitiveness of the business in red sea market.

Conclusion:

Buying a business in Singapore and running it, is a rewarding but demanding endeavour. While financial resources are crucial, having these 5 commercial skills will certainly increase your chances of success and financial payout.

Next Article: 9 Common Mistakes When Buying a Business in Singapore

At Fey Day, we are committed to empowering investors with the knowledge and guidance they need to thrive in the businesses for sale Singapore landscape. If you are considering to takeover business in Singapore, we invite you to connect with our experienced team to explore how we can assist you in achieving your investment goals.

Fey Day is a business broker in Singapore. Visit us at www.feyday.com to learn more.