Economic headwinds persist worldwide, and growth prospects in advanced economies remain shaky. With the Chinese economy weakening as it rebalances from export-led development, India is one of the bright spots globally.
India currently has over 16.9 million businesses and limited liability partnerships (LLPs). In December 2021, there were 17,170 new businesses, down from 18,405 in November 2021. More than two-thirds of these businesses have borrowed money from banks or non-bank financial companies (NBFCs). According to estimates, there are 1.16 million large-scale Indian firms with more than Rs 10 crores. SMEs account for 45 percent of industrial production and 40 percent of total exports.
Recent policy developments have played an essential role in promoting the growth of SMEs. India is rapidly improving the “ease of doing business through different regulatory regulations.” Initiatives such as ‘Digital India’ and ‘Make in India’ are increasing the potential of the SME sector. The critical question is how much of these ideas we can put into action on the ground.
IAMSME of India has been effectively supporting and strengthening the SMEs on four variables which are critical to the growth of SMEs. All of these would benefit only if the business concepts are solid. The technologies can supplement and increase growth, but they cannot replace the business model and its unique value proposition.
The world has made remarkable advances in Internet penetration and mobile network expansion. India is at the vanguard of the digital revolution. Today, India has the world’s second-largest mobile phone user base and the most extensive Internet user base. These figures are predicted to more than double by 2023. Digital transactions are increasingly enabling commerce. India has 40 million online buyers, and alternative payment methods such as pre-paid cash cards and digital wallets upset traditional industries such as banks. Physical branches may become obsolete in the future, and physical cash may become extinct or significantly less essential than today.
Digitization can improve a variety of business functions in a small business. Social networking, QR codes, mobile apps, and digital interfaces can enhance speed and efficiency in marketing, customer service, payments, inventory management, accounting, banking, and supply chain management.
Digitization also aids in the reduction of errors and the acceleration of operations. SMEs will undoubtedly gain much from digitization. Experts at IAMSME of India provide advice, hand-holding and consultancy for technology, and marketing, People Performance, IPRs, Financial literacy in order to strengthen SMEs.
Finance is simple to obtain
SME financing must be adequate at all stages of their lifecycle. Developing effective lines of credit and creative financing solutions assists SMEs in obtaining much-needed capital to accelerate expansion. Suitable structures, including the supply chain, can help lower the cost of funding. A good partnership with banks and financial institutions goes a long way toward generating win-win solutions for assisting SMEs in reaching their full potential. Keeping in view the dire need of adequate financing for SMEs, IAMSME of India provides credit counseling & facilitation, Financial Literacy and guidance on fund-raising.
‘People’ are the most crucial factor in helping SMEs distinguish and scale successfully. SMEs can gain a significant competitive edge by establishing a team of highly skilled and motivated employees. While it may not be able to do everything in-house, picking the proper partners to fill in the gaps can differ between scaling and remaining a cottage company. Regular training programs aid in delivering superior customer service, resulting in increased customer satisfaction and retention.
Business Support Systems that Work.
Any business must have solid systems to create innovative products by accurately understanding changing market conditions and analyzing client behavior and wants. In today’s competitive environment, SMEs must respond rapidly to international market indications, maximize trade opportunities, and reap the benefits of global trading networks.
The world is developing toward a “sharing” economy in which everything does not have to be built by SMEs. Using these support systems enables SMEs to benefit from the collective experience of all successful and failed businesses and apply it to their ecosystems.
Rajiv Chawla, Chairman IAMSME of India enunciates, “SMEs must work hard to achieve connectivity, domestic and international company growth, capacity building, and long-term success. If the leadership keeps a close eye on the abovementioned factors, it will go a long way toward establishing future-winning businesses. The idea is to use tools to create a solid business plan and model.”