Top 3 Challenges Faced by SMEs in 2022
Challenges Faced by SMEs in India
SMEs in India employ 40% of India’s workforce, employing about 106 million people. 42.50 million, both registered and unregistered together is the number of SMEs businesses in India. Collectively, it comes up to a jaw-dropping 95% of the total industrial units in India. These numbers are from the most trusted sources operating under the government. With our country developing in terms of technology through digitization, increasing FDI boosting opportunities, the last five decades have seen a remarkable change in the SME sector.
The SME sector is growing rapidly and with this swift growth, we ought to address the challenges that are faced by the SMEs in India. A business needs everything from finance to manpower to administration and much more in order to start, survive, and ultimately succeed in the market. Some vital obstacles the business owners face are unavailability or shortage of finance, lack of skilled/talented manpower. There are a number of challenges faced by SMEs in India, but for now, we would filter down to the top 3 and most important ones.
Coping with the technological advancements:
It becomes difficult for us to manage inventory, staff, accounts, etc. all at once, and that is why humans came up with advanced software for managing business activities. Whether it is ERP or inventory or accounting software, all these are a boon to a business owner. Adapting or encouraging the use of these systems can make a business run longer. Businesses nowadays rely on such software or advanced AI-equipped machines and tools. However, it is a task for SMEs to get access to new technology due to a lack of capital and awareness. As per research, about 20% of prevailing SMEs operate from rural and backward areas, this justifies the point that why there is no awareness of technological advancements. You can opt for SME loans in India; many banks, financial institutions, NBFCs have come ahead to offer loans to SMEs.
Depending too much on acquired clients:
Acquiring some big clients should not just stunt your business growth. In India, businesses or their owners have a thought process that lets the business run as it is post they acquire a handful of big clients. This can limit your business & profit and the growth slows down and ultimately comes to a point where it stops. But this dependency can prove fatal if existing clients stop doing business with you for whatsoever reason. In order to stop this from happening, try to market your products and business activities to more and more people. Spend a good budget on marketing and customer retention. Avail quick SME loans to do so as it has become easy to get loans for running your business. Get into print media, use social networks for promotions, and more such methods to add clients to your existing clientele.
Grow, but do not deteriorate quality:
Any or in fact all SMEs should make sure that during the process of growth or in the times when the business is growing, the quality shouldn’t deteriorate. Remember, it was the quality that got you the clients you currently have. Your Quality is your USP, so do not compromise on it. In order to do this, you need to hire the right people who know how to keep your product quality even when they have not introduced it. Outsource HR recruiters; spend on technology in order to do so. This definitely requires finance, but it is worthy enough to grow your business.
To make your business prosper and grow in the market in today’s competitive world, you need to have a strong financial backup. Do not hit the floors when it comes to financing your business. NBFCs today provide loans to SMEs. These loans fall under the unsecured category but there are only a few eligibility criteria that a business owner has to meet which are laid down to cut down the risk on the lender’s side. Lendingkart is one such NBFC that provides MSME loans exclusively for startup owners, small business owners, women entrepreneurs on a short-term basis. The range starts from Rs. 50,000 to a whopping 1 crore. The process is quick and online, the disbursement is usually done within 3 days, depending on the completion of procedures and clearing the eligibility requirements.
Other features of the loan offers – flexible repayment tenure, zero prepayment charges, no requirement of collateral/security. The loan offers vary from lender to lender. So, availing of a quick SME loan is worthy to run and grow your business in today’s competitive world.