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COVID-19: Extended Circuit Breaker Forces Business Owners To Change Their Mindset And Pivot

Earlier yesterday, the Singapore government announced further measures to control the outbreak of COVID-19. Among these measures include the extension of the circuit breaker period for another month as well as further closure of businesses in certain service areas.

Of course, this move will most likely impact the business outlook for most Singapore business owners. Most were already expecting to resume their operations two weeks later, but the extension has forced them to put aside that plan for another four weeks.

We spoke to seven local business owners ranging from various industries on their thoughts about the extended circuit breaker and how are they are planning to adapt to these new changes.

Damian Sia, Founder and CEO of Auto Concierge Platform Motorist.sg

All expansion and growth plan are put on hold as mindset is now shifted towards surviving and ensuring no one will need to take a pay cut.

motorist singapore
Image Credit: motorist.sg

As much as it is bad for my business, I fully support the extended Circuit Breaker as the most logical and effective way to tackle the spread of the COVID-19 virus. I hope everyone will do their part, to ensure there will not be any further extension to the Circuit Breaker.

For our company, I am expecting revenue to drop by as much as 80% during the Circuit Breaker period. At first, it is quite disappointing as 2020 was supposed to be an exciting year of growth for Motorist, with many key partnerships and investment plans.

However, that disappointment phase has passed, and my management team is focused on the survival of the business so as to support our team of over 40 employees without having to resort to any termination or pay reduction. Hence our mindset is shifted from a “growth” mindset to a “survival” mindset now.

As Motorist is a digital-first company, we were not impacted until April this year. In fact, March was our best ever month in terms of sales.

Since the implementation of the Circuit Breaker, Motorist was not deemed as an essential business, where this resulted to the non-operational of majority of our business units.

As revenue is forecasted to drop by at least 80%, our plan for this period will be shifted towards generating enough revenue to sustain the entire team’s overhead costs. We have redeployed most of our resources to business units that can still operate during this period.

With the Circuit Breaker being extended for another four weeks, it would be harder for us to sustain the entire team with our revenue being heavily impacted.

Thankfully, the government is supporting SMEs like us through the 75% wage subsidy. It is certainly a great help, as we can keep our entire team on payroll without reducing anyone’s wages in April.

Dennis Tay, Founder and CEO of Multi Label Lifestyle Retailer Naiise

Shifting of focus from retail to online channels, as well as the launch of a new online marketplace.

Dennis Tay, founder of Naiise / Image Credit: Nuria Ling via TODAY

This circuit breaker is definitely tough for our business but safety and health is also as critical. At least if we can see a huge drop in the number of COVID-19 cases, we will not need to worry about having to go into any circuit breaker again.

Like every other business, we are worried. However, we are doing everything we can now to mitigate the situation and to ensure our survival.

For us, our offline stores sales have dropped by 30% before complete closure for circuit breaker, but our online sales has grown despite a general environment of cautious spending.

Now that the government has announced a further four weeks circuit breaker, there is still a lot of uncertainty lingering. For example, will there be any further extension after June? We will just have to be flexible in our planning and adapt along with any further announcements.

For Naiise, what we have done is to push hard on our online channels. We have also launched our new marketplace for Naiise to automate and scale our e-commerce a lot faster and better.

This marketplace enables immediate automated payment to our partners for every sale and allows our partners to tap on our logistics providers even for their own personal orders. We have seen a good rate of sign up and sales so far from the marketplace channel.

Kent Teo, Co-founder and CEO of Invade (Artbox SG, Shilin Market, MOX)

New advisories around circuit breaker gives us very little time to react before things change again, but we are actively finding solutions to explore and execute.

Mr Kent Teo and Mr Kishore Buxani. Image Credit: Mox

On the bigger picture side of things, I believe that it is necessary for an extended period. It shows that our Government and the respective agencies are very determined to ensure that there is a drastic drop in the cases before life goes back to normal. Post-COVID-19, it will be a new normal for many of us.

My business had been severely crippled due to all the health advisories as our businesses are largely consumer-facing — festivals like Artbox and Shilin, and our co-making space MOX. We are experiencing a near-zero income situation due to the announcement of the circuit breaker.

It affects us greatly, as much as we want to pivot and transform, each advisory from the Ministry gives us very little time to react. As much as we want to quickly figure a way out, it takes time, resources and capacity to plan for it.

It puts us in a discouraging situation for our planning and development, but I believe that we are in for a long haul fight, we got to continue to grind and work it through regardless.

Like all SMEs, the extended period will worsen the situation and unless we manage to find a window to manoeuvre out of the situation, it gets more and more challenging each day. Thankfully, my team is backing me up on it and we have been finding solutions to explore and execute.

Regarding the government job support scheme, it is a good and sound temporary solution for the SMEs, However, I believe there should be more customised solutions to assist the SMEs.

Many of the SMEs have spent a good amount of resources, hardships to take the uncommon routes to compete in a very tight space in Singapore. We have gained many experiences, insights, knowledge and know-how that will be put to waste if many of such SMEs are to shut their businesses over the coming months.

Sham Adam, Founder and CEO of Hair Salon BeSalon

The next months will be full of uncertainties and we are taking it one step at a time, while putting our recruitment, marketing and salon training plans on hold.

Image Credit: Sham Adam

For us, we have sort of expected an extension looking at the number of cases daily.

While it has certainly impacted our business to a great extent, we agree with the decisions made by our government. In fact, I feel that we need to achieve zero cases for some time before our lives can go back to normal again. If not the whole nation’s efforts will be in vain. 

Every business owner is definitely worried about such uncertain times. It’s not just about the money. We are worried about our staffs and their livelihood, because a high percentage of their pay comes from their commission.

On top of that, for the salon industry, we are also worried for our clients as many of them have already been writing to us feeling upset about not being able to touch up their roots, and now not even getting a haircut anymore. This can be troublesome because in desperate times (and also a lot of time on their hands), our clients might try to DIY and screw up in the process.

We are actually grateful COVID-19 wasn’t widespread in Singapore yet back in January as it is our busiest peak season of the entire year. Usually business after Chinese New Year is quite slow for the hairdressing industry so we expected traffic to be slightly lower.

In March, when COVID-19 got more widespread, we are thankful that we managed to pull through and was able to cover our expenses. I guess our clients were worried about speculations of a lockdown so they planned ahead and for that, we are thankful for their support.

Business-wise, April, and May is the biggest hit for us as we can only open for business the past 2 weeks. Due to that, our April revenue saw a 80% decline.

We foresee that the following months will be full of uncertainties and sudden changes. Hence, in terms of business planning, we are just taking it one step at a time while putting our recruitment, marketing and salon training plans on hold.

While it now means zero revenue, we are positive that there will be a crowd once COVID-19 is over. Meanwhile, it is best to comply with the government’s plans and hope for a quick drop in the number of cases.

Jonathan Wong, Co-founder of custom tailoring label Mr Gentlemen

To adapt to this COVID-19 period, we might have to change our usual target audience.

Image Credit: Jonathan

For our business, we saw a slowdown in enquiries since March, mainly due to the restrictions in gathering size. Since our business anchors largely on weddings and events, our customers did not find the need to purchase suits and formal wear urgently, and our sales figure has declined since then.

To adapt to this COVID-19 period, there is a possibility that we might have to change our usual target audience, and take the time to monitor the changes in consumerism.

We usually will focus on wedding events and try to work with vendors related in that field to attract customers but looking at the current situation, plans for that might have to halt for the time being.

Normally, business will pick up for us during mid-year because of the weddings and events happening in the later part of the year, but looking at the extension, people might still be uncertain with the measures that the government might take and decide to not hold any large scale events soon, thus affecting sales of luxury goods.

We are also thankful for the government’s Job Support Scheme. However, it is impossible to pin all responsibilities on the government to cover the entirety of the employee’s wages.

That said, it is up to the employers and business owners to come up with new strategies during this circuit breaker period, and tackle the new issues that they might face even the after the circuit breaker is lifted.

Jeremy Lim, Co-founder Of Moonstone Bar And Almost Famous Bar

An aspect we are focusing on is on our own food delivery services where we saw improvement during COVID-19.

Image Credit: Jeremy Lim

We are definitely worried in this time of uncertainty. It has also been extremely challenging to be constantly on our toes having to react to new measures every other day. Not knowing how our new plans or initiatives would last to keep the business afloat has been a constant worry for us.

For Moonstone Bar, we have faced a steep decline in sales. We saw a 30% loss in revenue due to people staying at home, offices closing since the start of February. This is also due to the heightened social distancing measures where we lost half of our operating capacity.

While we explored delivery operations on third-party operators, we realised that these options were not sustainable for us. With almost 30% in margins paid as commissions and a relatively small delivery radius, that did not help our case that as of our clientele are are staying outside the CDB area.

The good thing about this circuit breaker period is that we have become a lot more lean in terms of operations. This period of time has really forced our hands to become much more efficient and savvy with how we run the business. These will be beneficial in the long run.

Right now, the focus remains to continue the business to ensure our team of staffs gets paid and that we will be able to continue to afford their wages for at least the next three months.

Another positive aspect that we are focusing on is that we do see demand of our food delivery services improving slightly or at least sustaining at the current level.

We have been putting up special delivery menus and I think people who are bored of being at home do want to try something different from time to time. Especially since we have had most of our delivery logistics sorted out and also able to tap on some grants, food delivery managed on our own has definitely been much more sustainable than before.

Regarding the Jobs Support Scheme, the new scheme that extends to shareholders and directors has been a saving grace. For small businesses like ours which are primarily operated by owners of the business, the previous scheme would not cover a large proportion of the overall wage bill for the business.

Ultimately, I believe many of us small business owners would eventually put this JSS grant back into the business to ensure the business survival in the longer term.

Yugene Lee, Founder and CEO of digital design agency Jin Design

My team and I are creating an improved business model to prepare for the new norm.

Image Credit: Jin Design

The extended period is going to be tough for the whole economy of Singapore, especially SMEs with low cash flow.

Many SMEs need to survive two months with 0-30% of their revenue and yet with 100% of its expenses. Two months could be a final blow to many SMEs.

Like many other business owners, I am worried. My company is lucky enough to be able to survive this period through some of our existing projects and projects we closed last quarter. My executive team and I are planning to create an improved business model to prepare for the new norm.

For us, our inbound leads have dropped by over 70%. Many new clients which was supposed to proceed with engaging our services have put their projects on hold.

On top of that, many companies have started to cut their marketing budget to reserve for the upcoming months, and that has indirectly impacted us as well.

In terms of planning for the future and anticipating an economy recovery, what we are doing now is to build a more robust marketing foundation to prepare for the bounce back. During the recovery period, we expect more companies to be prepared to spend on marketing.

With the circuit breaker now extended for another month, it means that what’s supposed to happen in May will be postponed to June or even July.

As the economy comes to a halt, consumers, companies or businesses will all be spending lesser. This decrease in consumer spending will cause a chain effect affecting design and marketing agencies like ours.

Author’s Note

From the various correspondence with the business owners, it is clear that while plans can be made, the current situation is very fluid. There is no guarantee that the circuit breaker will be lifted and business can resume after June 1.

Business owners are trying their best to keep their ships afloat and to keep their employees on payroll, and all of them are thankful for the Job Support Scheme that has been extended by the government.

And as Kent from Invade mentioned, many businesses in Singapore have spent a good amount of effort to build up their businesses in Singapore. It will be definitely a waste if these companies do not survive this COVID-19 outbreak.

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