SINGAPORE's small and medium enterprises are going places, and popping up in glitzy shopping centres in the region's capital cities.
Although SMEs have, for decades, ventured abroad, they were not normally visible - operating factories in drab industrial estates, tucked out of the way.
SMEs have traditionally gone overseas to set up factories in light manufacturing, garment or food industries, but less so in a consumer sector like food and beverage, said Tan Chor Sen, OCBC Bank executive vice-president, global enterprise banking.
"You'd hardly see these (F&B ventures) five or 10 years ago," he said.
Many Singapore SMEs are now in the food and beverage sectors in Malaysia, Indonesia, China, Hong Kong and Myanmar, he said.
"They are quite well-known and some are all over," said Mr Tan in an interview to mark the 10th anniversary of the Emerging Enterprise Award.
As part of his portfolio, he oversees the growth and development of cross-border capabilities and business within the region, leveraging on the OCBC network and partner banks in key markets such as Malaysia, Indonesia, Thailand, Myanmar and Greater China.
The Business Times and OCBC Bank are joint organisers of the award which first started in 1998. Into its 10th year, other partners are MasterCard, Acorn Marketing and Research Consultants, Insead, Spring Singapore, Singtel, Maxus and RSM, which is also the official auditor for the awards.
"I went to a shopping mall opening in Myanmar and was amazed at the queues in the bakery," said Mr Tan, who travels two weeks a month for work.
Mainboard-listed BreadTalk has a franchise agreement with Myanmar-based real estate Shwe Taung Group to establish the BreadTalk bakery chain in Myanmar.
He noted that if a F&B company is able to succeed in Singapore with its high cost of rent and labour, "you can survive anywhere else".
Besides setting up sushi bars and pastry shops in the region, Singapore SMEs have also expanded in the hospitality, construction, healthcare and education sectors overseas.
Singapore pre-schools and kindergardens have built up a reputation and gotten the formula right, said Mr Tan.
The industries the SMEs are in are reflective of the Singapore economy, he said. And the government plays a pretty big role in supporting SMEs when they go overseas.
IE Singapore, the government agency that partners local firms to venture overseas, says it helped to secure more than 450 deals around the world last year, bulk of them in China and South-east Asia.
In 2016, some 37,000 local companies of all sizes and across sectors - 80 per cent of them SMEs - benefited in one way or another from the statutory board's broad-based assistance, said the agency's chief executive Lee Ark Boon in a recent report.
Among the many notable homegrown brands that have gone global is Bee Cheng Hiang, the popular barbecued pork chain that now has branches in 11 overseas markets; it opened its first Tokyo outlet last October.
Shopback, an e-commerce marketing platform, sought IE's help and connections to break into the lucrative Taiwan and Indonesian markets.
Still, expansion overseas is challenging, and used to be done only by bigger companies which have resources, Mr Tan said.
Rules and regulations are different in each country, "it's not homogeneous, not like the EU (European Union)," he said.
Funding is a consideration and managing people is a bigger issue; companies grapple with the decision of hiring in those countries or sending staff from Singapore, he said.
But with the wide use of social media and easy connectivity, smaller companies are able to go overseas, and look to hiring potential employees there, he said.
For instance, a useful resource for employers is LinkedIn, he said. LinkedIn, a professional network where people post their resumes tells you whether the candidate has worked in Singapore or Myanmar and their work experience, he said.
Business is not always rosy of course and the failure rate is high, but he finds that entrepreneurs are generally resilient.
"I see the same people fail, and start up again," he said.
Generally by the first three years, 30 per cent of the initial cohort will wind up and by the 5th year, 50 per cent are gone, he said.
"That doesn't mean the business owner does not start another company. Failure is not a stigma, because the returns can be very great."
Business failure is of course anathema for banks, but bankers need to understand SMEs as they evolve, he said. "It's something we acknowledge and we work with them.
"Businesses that succeed are very versatile . . . going there, talking to these people, is amazing, I wish I was younger!"
Another recent development of SMEs is their fast growth pace, so they require "growth financing".
These promising companies grow very fast, but their capital may not be as strong, he said. That's where venture or debt financing comes in.
In 2015, OCBC and its asset management subsidiary Lion Global Investors set up a S$550 million private equity fund investing in high growth SMEs in Singapore, Malaysia, Indonesia and China.
A press statement announcing the fund said rapid urbanisation and economic growth in China, Indonesia and Malaysia are expected to drive massive demand for real estate, telecommunications networks, utilities and other infrastructure projects.
As well, those markets' transition to knowledge-based economies and the rapid growth of their middle classes point to a future increase in domestic consumption of discretionary items, including automobiles, luxury goods, travel, healthcare and education.
Turning to small businesses or startups where a recurring issue is funding, Mr Tan said banks do need to keep up to understand them.
When he joined OCBC 12 years ago to head the bank's emerging business unit, he went to the US and Europe to understand the model of banking small companies in those countries.
Banking small companies with turnover of less than S$3 million was not the focus of Singapore banks, he said. Even in the US, it was a new thing, he said.
For instance these very small companies still need relationship managers to serve them, but that would be too expensive for the banks, he said. "SMEs are not homogeneous."
A recent development is the number of young people, such as fresh graduates, who are behind startups.
Parents no longer discourage their children from starting businesses. "In fact parents give them the seed money," he said.
Another trend he observed is the growing pool of foreigners coming to Singapore to start small businesses.
Singapore is one of the most convenient places to start up, with its efficient telecommunications and transport linkages, as well as a vibrant ecosystem. "We're now in the forefront," he said.
Many startups are in the new economy such as in biotechnology, fintech, medtech (medical technology) and e-commerce.
The ecosystem for startups has developed with quite a bit of government support, from making sure Singapore is an easy place to do business by providing grants such as seed money, as well as building the infrastructure, he said.
Last month, it was reported that some S$200 million has been allocated by the government to catalyse equity investment in deep-tech start-ups, and an additional S$20 million set aside to encourage first-time entrepreneurs to start up.
The S$200 million investment, made to the Startup SG Equity scheme, seeks to boost support for startups in areas such as medtech, cleantech, and advanced manufacturing and engineering.
The annoucement was made by Koh Poh Koon, Minister of State for National Development and Trade and Industry at the Phase 2 Housewarming Party of the JTC LaunchPad @ one-north.
Three new blocks - 75, 77 and 81 - were completed at the LaunchPad. This brings the total number of blocks at the LaunchPad to six.
The first three blocks (71, 73 and 79) were officially opened by Prime Minister Lee Hsien Loong in 2015.
Incidentally, four past finalists of the Emerging Enterprise Awards have come from Block 71, which is regarded as the hot spot for startups.
With all this support, why do SMEs say they have problems with funding?
Mr Tan said of the 36 per cent of SMEs who have applied for bank financing, 98 per cent got it. This is based on a recent DP Info survey
However, not every SME wants to borrow; they can also access grants or venture capital. The government also helps with risk-sharing loans.
OCBC launched two risk-sharing loans last year. Its SME venture loan provides financing of up to S$5 million for each young business for its expansion, be it venturing overseas, undertaking new projects or mergers and acquisitions.
The SME working capital loan is a collateral-free loan of up to S$300,000 to help SMEs in their business growth and restructuring activities.
Still, there are some gaps in funding, he admitted. They are often due to a lack of track record and it is a matter of education for the SMEs that they must keep proper documentation, he said.
It's not that bankers do not understand that individuals do not separate business from the personal, but proper book-keeping or paying your bills on time is also a reflection of the business owner.
"Business owners are more prepared now; many have degrees or tertiary education and are pretty exposed."