Although the company was in generally good financial health, thanks to its strong performance, SSCH recognised that business expansion without a strong system in place could hinder further growth. The company also wanted to assess its financial position and to determine the soundness of its business model in the long run. SSCH, therefore, sought assistance under the Financial Advisor Programme (FAP).

FAP is jointly promoted by Productivity and Standards Board (PSB) and Singapore Chinese Chamber of Commerce and Industry to help viable local companies strengthen their capital structure, trim costs and improve cashflow management.

Under FAP, SSCH engaged Stone Forest Consulting Pte Ltd (SFC). The process began with an overall operations and financial review.

SFC and SSCH then began work on a business model, beginning with financial and cashflow projections and manpower budgets, leading to the development of a financial plan as well as an action plan to help SSCH focus on key areas to achieve the desired results.

"The purpose of the financial plan is to give the company a target to pursue," said Mr Chio Kian Huat of SFC. "The company knows that if properly executed, it can achieve results."

In addition, a system to track key performance indicators such as sales per square foot, sales per sales person, rental to gross margin and payroll to gross margin, was put in place.

Other areas under review were SSCH's organisation structure, and operation control and business processes. The former involved beefing up areas such as financial control and other operations functions like warehousing, advertising and promotion, while operation control and business processes worked on a structured and regulated pricing mechanism to boost profit.

Said Mr Chio: "The objective of installing operations control and improving business processes is to help SSCH enhance its ability to handle larger scale operations."

"I am very pleased to have embarked on FAP," commented Mr Sim Siang Choon, SSCH's Managing Director. "With new systems and structure, which were implemented in a short period, SSCH is in a better position to move ahead with our expansion plans."

Small and medium enterprises implementing FAP can tap PSB's Local Enterprise Technical Assistance Scheme to defray up to 70 per cent of consultancy and implementation cost. For more information, contact PSB's SME First Stop at Tel: 6898 1800

Source: Singapore Enterprise. January 2000. Reprinted with permission.

Year published : 2000