By Elizabeth Wilmot

RAISING capital and manpower problems are still the main issues facing start-ups, but fewer firms seem bedevilled by them, according to a new survey.

The poll compared results gleaned from companies in 2007 with those collated late last year, and the signs were clear - doing business in Singapore is getting easier.

DP Information Group and Action Community for Entrepreneurship (ACE), a movement launched to foster go-getters, polled 1,808 businesses that had been in operation for less than three years. In 2007, 1,521 start-ups were surveyed.

In both years, raising capital and manpower were the top two issues for the companies but, last year, fewer entrepreneurs cited them as challenges.

Last year, 46 per cent of the start-ups polled said raising capital was an issue, against 57 per cent in 2007. Manpower was an issue for 38 per cent of respondents in 2007, but only 27 per cent last year.

ACE deputy chairman Inderjit Singh said: 'Over the years, ACE and government agencies like Spring have worked hard to enhance the business environment in Singapore.

'The results show that the concerted efforts have made it easier to do business in Singapore in the long run.'

DP Information Group managing director Chen Yew Nah said: 'Manpower issues should ease as a larger pool of experienced staff becomes available after the inevitable workforce reduction larger companies will be required to make.'

Survey respondent Desmond Hsu, general manager of Fast And Safe Technology, which offers data encryption services, said: 'At the start of last year, it was very difficult to get people; now, it's easier. This year, a lot of people are looking for jobs.'

He said his firm's recruitment of two new employees drew three times more interviewees this year than last year.

Ms Chen noted: 'The global credit crunch makes it hard for start-ups to access private-sector funds.

'The Government has already recognised this, and has introduced new and enhanced funding schemes.'

Although fewer start-ups faced certain challenges last year than in 2007, the survey revealed that one issue loomed large - customer acquisition.

'With fewer opportunities in a recession, it is no surprise that start-ups are finding it increasingly tough to acquire new customers,' said Ms Chen.

Customer acquisition was a challenge for 22 per cent of firms surveyed last year, up from 17 per cent in 2007.

Survey respondent Terry Thng, chairman of Barter Vista, which creates platforms that allow small and medium-sized enterprises to barter with one another, found it harder to win customers last year.

'When we acquire customers, there is a registration fee of $800. A few years ago, when we did that, it was quite affordable,' he said. 'Now, we feel they (customers) find $800 a challenge.'

When asked about prospects for this year, 57 per cent of respondents were not optimistic. Those in retail and services were the most pessimistic, as consumers are expected to be more prudent in their spending.

In addition, 90 per cent of respondents reported slower sales last year while 10 per cent had orders cancelled.

Cancellations were particularly prevalent in the manufacturing and transport/storage sectors as exports declined in the second half of the year.

Despite the gloomy sentiment, Mr Singh had some tips for start-ups. He encouraged them to 'come up with new and innovative ways to brand themselves, to attract more customers or to look for new sources of customers'.

He added: 'I am confident that if our start-ups persevere and relook their business models to adjust to the new climate, and at the same time make use of the various government assistance schemes to upgrade themselves, they will not only ride out the current economic crisis, but also emerge stronger.'

This article was first published in The Straits Times.