One of the main growth strategies for booming SMEs is to venture overseas – a particularly important process for firms looking to outgrow Singapore’s lean consumer base. Local SMEs are increasingly keen on overseas expansion. Many are actively seeking assistance – 80% of the 99,000 cases who received help in overseas expansion from International Enterprise (IE) Singapore are SMEs. For SMEs to succeed in Asia Pacific’s relationship-centric economy, establishing business partners through physical networking is key, and business travel plays a huge role in building these relationships. However, business travel can be a challenge for SMEs to tackle.
For a start, the high cost of business travel can be a hurdle for many SMEs. While 2017 was a stellar year in terms of economic growth, SMEs have yet to reap the full benefits from it. Cost of financing is remains a concern among SMEs – in the 2017 SME Development Survey by DP Info released in November, about 35% of SMEs said they had finance-related issues – 13% more than a year ago, and the highest since the survey began tracking the issue in 2011. And among these 35% of SMEs, the proportion experiencing delays in payments from customers skyrocketed from 14% in 2016 to 81% last year. Already lean on resources and with the mounting cash flow challenge, it is almost a reflex for SME business owners to either handle travel management themselves or have the HR/finance/IT department double up on their roles as a cost savings measure.
However, taking on business travel in-house can be risky, especially without a proper understanding of what business travel management entails. This can result in poor budget management or even litigations in more complicated cases.
Planning for restrictions in budget travel options
Small businesses favour budget flights and accommodation for immediate cost savings, but budget options are often highly restrictive. The cheapest flights are usually at off-peak hours, which translate into unproductive overnight airport stays or long transit hours.
Budget airlines' strict anti-cancellation bookings pose additional problems with last-minute itinerary changes or delays – organisations could end up forking more money for another air ticket. Similarly, cheaper hotels are commonly located in less well-connected areas, and cost savings may eventually be rendered useless from high travelling costs.
Selected accommodation should be both affordable and accessible. To avoid traffic jams, accommodation should be no more than an hour away from the reporting site.
Booking single-trip flights allow for maximum flexibility and special corporate rates from full-cost carriers can provide more value than low-cost carriers. Some airlines even have loyalty schemes designed for SMEs that can help save cost in the long run.
Going digital for better deals
As travel planning is considered a secondary task, employees can neglect sound corporate travel policies, and have little capacity to scour through websites for the best deals.
To overcome this, SMEs can use digital monitoring tools for the best booking rates available. Equipped with natural language capabilities and powered by artificial intelligence, chatbots make for an intuitive and seamless tool to help companies make instant bookings at the best rates and stay compliant. Travelling employees faced with a last-minute change of plans can simply turn to chatbots, avoiding a further strain on the SME’s manpower resourcing.
Understanding duty of care
Unlike leisure travel, employers are legally bound to provide for their employees' welfare and security under the Duty of Care legislation. One major component lies in risk mitigation, which includes training and alerting employees on potential risks during travel. For example, should employers fail to teach a Japan-bound employee the basic evacuation routines during an earthquake, they can bear legal implications if the employee is harmed in the event of a disaster. Every country’s duty of care regulations varies, and it is important that businesses are familiar with the nuances.
Hiring an experienced travel manager to manage compliance issues is the safest option. Otherwise, companies can start with cross-referencing to established corporate travel plans as a rough guide, before consulting their dedicated lawyers for final approval.
Considering your business needs
To maximise resources for business travel, it is critical that SMEs have experts well-versed in the corporate travel trade to help navigate multiple nuances.
For companies just starting out in business travel, the tips listed above can help them to better handle infrequent, short trips independently. As business travel picks up, business owners run larger risks and potentially higher costs in ineffective management. As the theory of economics as long proven, specialisation is key to efficiency. Whilst companies may struggle with upfront costs, the convenience, expertise and legal insight of a dedicated Travel Manager will still triumph in the long term. After all, time is money, and every minute spent on planning business travel could be alternatively used in driving business results.