Cash Flow Key To SME Survival Amid Global Uncertainty, Says Business Consultant

By Abdul Hamid A Rahman

KUALA LUMPUR, April 13 (Bernama) -- Cash flow has become more critical than profits for small and medium enterprises (SMEs) amid ongoing global uncertainty, as businesses are experiencing shocks that occur faster than their revenue cycles can absorb.

Globaltech Horizons Asia (GTH-Asia) Pte Ltd regional director Jack Yang said that cash flow becomes more important than profit during periods of uncertainty because profit is often just on paper, whereas cash determines survival.

“You can be profitable but still collapse if you run out of cash. Right now, shocks are occurring faster than the revenue cycle, so businesses cannot rely on future profits...They need cash today,” he said when appearing as a guest on Bernama TV’s Bernama World programme, today.

Yang was commenting on the current developments surrounding the West Asia conflict, which are beginning to affect business costs, supply chains and financing conditions.

In another devlopment, Yang said SMEs should secure access to capital early to cushion the impact of tightening financial conditions.

“If you are able to secure access to capital right now, please do so before you feel the squeeze. And if you get the capital now, it is better than getting it later when you need it urgently,” he said.

On resilience, Yang said ASEAN SMEs are highly adaptable but remain structurally underprepared to withstand repeated global disruptions.

“I think that ASEAN SMEs are really, really resilient, but they are not structurally prepared.

“They are strong in hustle, they adapt well and have good relationships, but they are weak in financial planning, risk management and access to diversified capital,” he added.

Globaltech Horizons Asia is a business consultancy firm dedicated to empowering companies with strategic solutions that drive growth, operational efficiency, and market expansion. 

-- BERNAMA