Why is cyber security important for SMEs?

Being the owner of a SME can often leave you with a lot of things to be managed. And if your enterprise is benefiting from utilizing the advantages of the world wide net, then you would also be facing a consequent threat to through online scamsters and cyber hackers.

Targeting smaller companies
Cyber attackers are now expanding into a new segment moving further from large IT enterprises to the more gullible Small & Medium Enterprises (SMEs), which are often found to be less conversant with the nuances of cyber crime. What’s more worrying is that these companies are targeted on a regular basis. A lack of information about such crimes and reduced proficiency are one of the major reasons for these crimes occurring in large numbers.

 

How to tackle cyber crimes
A lack of cyber knowledge is the biggest flaw suffered by the enterprises which are often duped by basic phishing attacks. Imparting information is necessary especially among staff. Another crucial step which could help you is to recruit trained staff which has the technical knowledge to handle similar situations. A lack of awareness is the key factor and hence, employees need to be regularly updated about such occurrences and asked to maintain safety against such threats.

SMEs have to understand this threat clearly and believe that their company could also be threatened by such an event. Many agencies believe because they are a very small enterprise, they are not under threat – a notion, falsified by the rise in cyber attacks over the years.

Another important factor could be the adoption of various technologies which are self-sufficient in tackling a cyber threat. Equipping your systems against viruses, spyware and other malicious codes is the most important step as the cyber attacks rely on the chinks in the system. You also need to take backup copies of the important business data from time-to-time to be protected in case of a severe attack to the system.

The office systems need to be secured and unauthorized persons should not be allowed to operate the systems. Presently, most of the offices operate a Wi-Fi network which needs to be secured so that illegal hacking cannot be executed on the systems. Each employee needs to be given their own separate accounts and care should be taken that they do not access data or information from your main frame systems.

Strengthen network security
Another key fact is to focus on network security courses. They are another important step in training SMEs about defensive systems to maintain security under such circumstances of an attack. Such courses inform oneself about the standard behaviour of a cyber attacker and also train them in the latest & best methods in defending the effects of such an attack. You should necessarily conduct an assessment of your present security status against such attacks and understand the fields in which they require an upgrade. Even though the systems may prove to be a bit on the higher side while setting up, their presence is an assurance on the long run.

Expert Speak: Mr. GK Pramod

Vision Statement For Your Enterprise

What is vision statement?
Vision means the long term goals of the business organization.

Let us ask the following questions to microlevel entrepreneur Charan Singh and Sunanda Pai to gauge the understanding of microlevel entrepreneurs regarding their vision statements.

Expert: “Dear Charan Singh and Sunanda Pai, can you tell me what is the long term objective of your business organization?”
Charan Singh: “Sir, I want to make more money”.
Expert: “Charan, I know every businessman is interested in making money, but my question is “What is the long term objective of your organization?”
Charan Singh: “Sir, please give me an example of vision statement so that I could understand it in a better way.”
Expert: “Ok. I think you know Amul (Amul is a milk product producing company located at Gujarat in India). Amul is a famous brand in the international market. Please note that Amul also started its business on a very small scale.”
“Amul’s vision is to provide more and more satisfaction to the farmers, their customers, employees and distributors.”
Source: www.amul.com
 

Cane-o- la which serves natural fresh sugarcane juice has the following vision
“To evolve as one of the best producer of quality sugarcane which is organically grown, extract juice scientifically and serve a totally natural, healthy and hygienic DESI refreshment in the world and continue to retain the position through constant education analysis, development and implementation as required by social, scientific, economic and humanitarian perceptions.”
Source: www.cane-o-la.com
 

Expert: Is it clear?”
Sunanda Pai: “Yes Sir, it is clear.”
Expert: “Now I want both of you to make a vision statement of your organization. I will give some inputs to you. Look at the self SWOT analysis and organization SWOT analysis and take the inputs from that to make the vision statement.”

Both of them agreed to do so and requested some more time to formulate their vision statements.

After one hour both of them came with their set of vision statements. Charan Singh (Fertilizer business) made the following vision statements for his organization and along with the expert; Charan Singh did the analysis of their points.

Vision Statements (VS) for Charan Singh’s organization along with expert’s analysis:

VS-1: To sell good fertilizer to customer.
Expert Analysis: This may not be the long term vision statement.

VS-2: To provide the best quality fertilizer, seeds, agro-equipments and pesticides for customer. 

Expert Analysis: This may not be the long term vision statement. 

VS-3: To be the one stop solution for farmers. 

Expert Analysis: This is more suitable.

After the discussion, Charan Singh and expert decided the long term objective of Charan Singh’s organization. The Vision statement for Charan Singh’s organization is “To be the one stop solution for farmers”
 

Sunanda Pai also came up with the following Vision statements for her organization and along with the expert; Sunanda Pai did the analysis of their points.
 

Vision Statements (VS) for Sunanda Pai’s organization along with expert's analysis:

VS-1: To create adventurous attitude to our customers.Expert Analysis: Creating the adventurous attitude for the customers would be a difficult task. So this was rejected.

VS-2: To give the best experience of adventure sports to our customers.Expert Analysis: Sunanda Pai’s organization can always provide the best experience of adventure sports to their customers irrespective of very high investments. If Sunanda Pai can sustain the business for another 3 to 4 years, then definitely her organization can become the leader. This Vision statement is more practical.

VS-3: To be the global leader in the adventure business.Expert Analysis: For a Microlevel Entrepreneur to become a global leader, Sunanda Pai has to invest more money in her organization. This was practically difficult. Hence, this Vision statement was also rejected.

VS-4: To do business of Rs.50 Lac in the next 3 years.

VS-5: To open branches all over India.
Expert Analysis: The expert senses that points 4 and 5 will not make up a Vision statement because they are not long term objectives of Sunanda Pai’s organization (doing Rs.50 Lac in next one year, opening branches all over India are considered to be short term goals.) So, points 4 & 5 were rejected.

Based on this analysis, the expert and Sunanda Pai decided that the vision statement for Sunanda Pai’s adventure sport business is “To provide the best experience in adventure sports to our customers”
 

Importance of Vision statement

• Vision provides a long term goal of the organization.
• This would help the microlevel entrepreneur to setup a proper direction for his business.

Methodology for making Vision statement 

Step-1: Address all the microlevel entrepreneurs and explain to them what is a vision statement and also, how to make a vision statement?
Step-2: Ask the microlevel entrepreneur to look into personal and organizational SWOT analysis, and come up with a few vision statements.
Step-3: Growth Strategists/CEOs can sit face-to-face with the microlevel entrepreneur, analyse the vision statement, and arrive at a common vision statement for the microlevel entrepreneur.
 

Author’s Key Points:

• Vision of the organization is very important to achieve the long term objectives of the organization.
• The microlevel entrepreneur and growth strategists/CEOs need to have open minded discussion in making vision statement.
• Vision should be the nucleus of the organization.

The blog has been authored by Mr. GK Pramod, Co-founder, The Second Gear - MBA for Non MBA's Mentoring Module Concept.
To contact the author, e-mail at gk@tothesecondgear.com
 

Kindly leave your comments and queries.

The BSE SME Exchange is here

The month of March 2012 witnessed a remarkable moment for the Small & Medium Enterprises (SMEs) with the launch of an exclusive Stock Exchange, supported by the Bombay Stock Exchange (BSE). The much discussed project was initiated by the BSE and NSE to offer an alternative stage for SMEs to raise capital for their growth and progress. The BSE SME exchange shares a common platform and infrastructure with the BSE whereas the NSE launched its version ‘Emerge’ with an online version.

More freedom for SMEs
The SME Exchange marks a new beginning for all small and medium-sized businesses in India which were introduced to this concept in the past one year. It is believed that Indian SMEs lack information regarding equity capital, stock market and funding options besides banks. Their dependence on banks and private lenders can now be easily replaced by this new initiative. The SME Exchange is expected to provide equity financing which can lower the debt burden of the listed companies, resulting in lower financing expenditures and a healthier balance sheet. This can help SMEs in developing their business from expansion to acquisition. Another important contributing factor is the visibility of the company which would be boosted by such an exchange and offer them access to the capital market. It also prepares the SMEs to grow and break into the bigger exchanges. Start-up issues related to many SMEs can also be solved by the presence of an exchange.

The Exchange and its operation
Various exchanges such as AIM (London), TSXV (Canada), GEM (Hong Kong), KOSDAQ (Korea) and NASDAQ (USA) were observed and studied to adapt their salient features and best practices. The SME Exchange would involve a minimum of 50 investors and Rs 50 lac post-initial public offer (IPO) paid-up capital. Listing would be compulsory for companies which have Rs 50 lac to Rs 10 crores and companies which have a paid-up capital between Rs 10 crores and Rs 25 crores have an option to list either on the SME Exchange or the main exchange.

Welcomed with open arms
The Exchange has received an encouraging support from various segments of the industry including manufacturing, textiles, IT, agro-based enterprises, and construction, among others. Even merchant bankers have expressed their interest in the initiative. Focus is on encouraging investments from small industrial towns and cities such as Dehradun, Jamshedpur and Haridwar, for raising capital from the SME Exchange. Tier-II and Tier-III cities are expected to be a big market for the SME Exchange.

New beginnings
The listing of BCB Finance marked the start of the BSE SME Exchange. Six SMEs have been already approved to enter the capital market and seven more are expected to follow suit. The target is to include about 10 by the end of the fiscal year and then extend up to 100 in the coming 18 months. An estimate puts the number of SMEs at a whopping 30 million, out of which about one million have a potential to be listed on the SME Exchange.

FICCI and Facebook collaborate to help Indian SMEs

The Federation of Indian Chambers of Commerce & Industry (FICCI) and Facebook partner together to help the Indian small and medium enterprises (SMEs) to harness the capability of Internet and Social Media.

Mr Rajiv Kumar, FICCI's Secretary General, said, “FICCI is delighted to be the anchor partner for Facebook in India to run its global SMB Boost program. The SME sector is an area of critical focus for FICCI considering its impact to innovation and growth. In addition to working with Facebook to provide this Boost to our members, FICCI and Facebook will also integrate training sessions on online marketing through social networks in its tradeshows and Conferences for SMEs.”

Moreover, India currently got almost 6400-industrial clusters, out of which almost 6000 are low tech. The poor technology adoption continues to stay as a significant cause for the poor operational and marketing competitiveness in the MSME sector.

Jointly, Facebook and FICCI hope to make technology as the consistent growth factor for boosting the international competitiveness of the Indian SME sector via this partnership.

Read more on: http://news.indiamart.com/story/ficci-and-facebook-collaborate-help-indian-smes-156960.html

Budget Potpourri for SMEs

The year 2012 has witnessed a lot of political upheavals and financial uprisings are also expected in the year ahead. The Indian finance minister Pranab Mukherjee in his recent budget speech has offered a variety of moves to boost the small businesses sector.

The FM has mentioned that the government would source about 20 per cent of their purchases from the micro and small enterprises sector. This is expected to encourage the growth of this sector. The government has hiked the service tax rates from 10 to 12 per cent which may contribute to an overall hike in prices of various commodities. Encouraging the field of agriculture, it has provided duty relief to it. Similar attempt has been extended to other troubled sectors including infrastructure, railways, roads, civil aviation, health, nutrition and environment. Also, the agricultural credit has been promoted to Rs 5,75,000 crores.

Service tax would be based on a negative list with all services being taxed except for a list of 17 items. Some sectors have also been exempted from the taxation. A common tax code is planned which will combine the Central Excise and Service Tax.

Providing more sops for SMEs, the turnover limit for mandatory tax audit has been raised to Rs 1 crore from the previous Rs 6o lac. This would encourage growth among the SMEs which can utilise the necessary relief.

With regards to special SME industries, tax rebates are extended to sectors such as steel, textiles, branded readymade garments, labour-intensive sectors producing items of mass usage, low-cost medical devices and semi-mechanised units producing matches. Similarly, energy saving devices have been encouraged along with plant and equipment needed for solar thermal projects. The budget announcement also brought a special smile to MSMEs working in the handloom, power loom and leather enterprises who received a special waiver. The FM has also proposed weighted deduction for expenses related to skill development which will assist the MSMEs in investing more on skill development supporting quality production.

Government is planning a series of measures keeping in mind the need for infrastructural development and achieving a high rate of growth. Thus, resource raising would be facilitated in the coming financial year for SMEs. The government would be investing about Rs 5, 000 crores in setting up on an India Opportunities Venture Fund along with SIDBI to offer easy equity to MSMEs. This is in addition to setting up of Bombay Stock Exchange (BSE) & National Stock Exchange (NSE) SME exchanges. There would be an exemption on capital gains tax for property sales which are focused towards investments in SMEs. This can greatly solve the issue of funding for SMEs which are starting out or the ones which are planning to expand their business.

Also, the government is planning to come out with the Goods & Sales Tax (GST) in August 2012 which is expected to address the issue of multiple taxes faced by the Indian MSMEs. The MSME industry is eager to know about this implementation which will accelerate the growth of SMEs in a big way. 

Delayed GST - major cause of worry for MSMEs, says IndiaMART CEO Dinesh Agarwal

With the ongoing pre-budget phase of Union Budget 2012-13, the most fertile minds of Indian Micro, Small and Medium Enterprises (MSMEs) are already discussing desired outcomes for next fiscal and bringing forth their recommendations.

Underlining his recommendations for the Budget, Mr. Dinesh Agarwal, Founder and CEO, IndiaMART.com, shares, "The MSME sector, having contributed tremendously to the Indian economy, has always lacked requisite support from all quarters. The time is ripe to support and equip them to establish their strong foothold in domestic and international markets.

Many believe that credit crunch is the biggest worry for MSMEs. However, they overlook the fact that higher and multiple taxes, and compliance with multiple departments are the key challenges for them due to their small set ups and thin management. We request the hon'ble Finance Minister to simplify and unify taxation for MSMEs in this year’s Union Budget. Also, consolidation of multiple departments will help address issue of compliance. It will help MSMEs rise above pertinent issues of conforming to several norms and lengthy, time-consuming paper-work.

Also, the delay in GST implementation has marred hopes of many MSMEs. They fear that now it may get rolled out in a much complicated form, not in its original shape. To tackle this, a pragmatic approach towards faster implementation of GST is required.”

Mr. Makrand Appalwar, CMD, Emmbi Polyarns Limited, Mumbai, also finds faster GST implementation as the most important requirement today and urges government to kick start it at the earliest.

Mr. Agarwal adds, “Essential infrastructural necessities such as land, power, connectivity, et al may seem to be very basic, but in reality they are extremely crucial for MSMEs’ growth. For this, more industrial zones with reasonable land prices must be announced while continuous power supply must be made available to factories, manufacturing set ups of MSMEs.” Mr. Dinesh Kotian, Partner, Ace Heat Tech, says, "Every enterprise aims to grow bigger and so do SMEs. Expensive industrial land comes as a major hindrance along with high interest rates in company's expansion plans. Steps should be taken to offer subsidized land and interest rates to SMEs. Also, a substantial number of SMEs have their setups in outskirts of cities. Unfortunately, basic infrastructural requirements like road connectivity, power supply, etc. are not in good condition in such areas. Government should pay attention here as well." Adding to this, Mr. Appalwar says, "Development of port infrastructure is very vital as the efficiency of exports depends majorly on it. We have a single port operational here in Mumbai and if any fault happens at the back end, entire operations suffer."

On the other hand, Mr. Agarwal praises government’s efforts for bringing effective policies that have helped build ‘communication infrastructure’ in country in the last 15years. He states, “What is now required is better and low-cost broadband services across the country, especially in tier-II and tier-III cities. This would allow MSMEs to utilize enormous business opportunities present online.

Strong steps are required from our government to free MSMEs from the credit crunch worry too. Execution of priority sector lending policies for MSMEs demands rigorous approach. Also, Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) needs to widen its ambit and cover more MSMEs which can avail collateral free financing. This will help entrepreneurs to overcome financial hurdles while setting up their projects or scaling up.

We also look forward to extension of facilities (such as Zero Duty Export Promotion Capital Goods (EPCG), Status Holder Incentives, etc.) for exporters under Foreign Trade Policy till March, 2014 instead of the current time line i.e. March 31, 2012. This will encourage MSMEs to achieve higher export figures.

We hope to see a budget that addresses key requirements of MSMEs in terms of basic infrastructure, simplification of taxation, easy access to funds, among others.”

Your Company Deserves to Have a Logo

A logo represents a symbol which is used to create awareness about an entity. It is employed by a wide variety of businesses, enterprises to symbolise their agency, product or even mark certain achievements in its history. However small you believe your enterprise is, there is always a tomorrow and you’re going to need a logo sooner or later.

 

Why create a logo
Small & Medium Enterprises (SMEs) can benefit from the presence of brand logo which would reflect the face of the company. It also enhances potential customers and marks the crucial first impression for the business in front of potential partners and business houses. It narrates the kind of people or the type of company which it is recognised as. Often, logos are designed on the basis of the name or function of a particular enterprise. Designed using graphical codes and symbols, they are made attractive and eye catching. Often, brand recognition and marketing is closely related to the presence of a beautiful logo. The better the logo, the more people will recognise a company; the more the recognition, the better goodwill for the agency.

Elements of a Logo
A logo can be distinctively divided into about three distinct elements, namely pictogram which represents a symbol or icon related to the company, the wordmark which mentions the name of the company and a tagline or baseline which mentions a brief description of the company or product. For example, the brand Nike has a pen stroke representing a check for pictogram with ‘Just Do It’ as the tagline. Considering Nike represents a sportswear brand, the logo reflects its relation to the field of sports.

SMEs can opt for typographic logo such as Kellogg’s or IBM which represent the company logo written in designer text format. Other firms go for figurative logo such as Apple or Shell which have a figure representing their brand. While there are companies such as Adidas or Reebok which have a combination of strokes representing their brands which can be termed as an abstract approach to logo design. 

 Making a logo that stands out
While designing a logo, care has to be taken to keep the design as simple as possible. Too many complicated graphics may turn the design into an eye sour and it may also become a ridicule for the company. Clarity of representation along with that of thought is a must for a successful logo design. The colours to be adapted for the design need to be bright and vibrant reflecting the right blend of brightness and contrast. Bold colours in a messy combination can ruin the design also.

Before designing, the agency also needs to observe trends in the industry and look at logos of competitors. Logos which appear similar could lead to losses for both companies. The logos should essentially reflect the company and hence a presence/mark of the company needs to be a part of the logo. Placement of the logo is also vital and SMEs should emphasize the symbol in all their correspondences and associate it with their various initiatives.

A wide variety of graphic designers and web experts are now churning out logos for upcoming SMEs. Advertising agencies also specialize in logo design although they would charge an exorbitant sum for the same.

Let the logo communicate your company's ethos, values and vision. Let it stand for your company and establish an identity in the market.

SMEs & Taxation

Small & Medium Enterprises (SMEs) make up for a majority of businesses and a bulk of employment in developing countries and thus their taxation process becomes a subject for discussion. They are one of the most rapidly growing business segments and thus should be aware of information regarding taxation.

Registering for tax
Any SME or a new business needs to be registered with the government to avail any kind of tax incentives offered by the government. The company must be primarily be approved by Registrar of Companies (ROC) to begin business in a country like India. Registration also qualifies the SME to attain a taxpayer identification number (TIN) which is a pre-requisite for conducting business operations. They also need to register for a permanent account number (PAN) and pay VAT or sales tax. They also need to be member of Employees Provident Fund Organization (EPFO) and Employees State Insurance Corporation (ESIC). 

Paying the right taxes gives your company better value

Each state of India has a separate registration which is covered under Shops and Establishments Act. Stamp duty also needs to be paid at the time of registration. Even though the tax details are a bit complicated, tax compliance is necessary for smooth operations of business. Also, to set up a new business or to get licences for the same, SMEs need to visit various authorities both at State and municipal levels. The procedures could involve the participation of a wide variety of agencies regarding building permits, land use approvals, power and water connections and obtaining final occupancy certificates, etc.

Making use of tax benefits
Besides setting up, there are regulations which govern the hiring of labour and employees for a particular organization. These regulations vary according to the size of the company and are often very strict pertaining to employee rights. SMEs can benefit from a range of tax benefits which the government has allocated to encourage their growth. For example, new businesses can avail a substantial reduction in employer NI (National Insurance) contributions.

They can also utilise capital allowances for buying an asset such as cars, tools or other equipments related to the business. They do not need to deduct the expenditure from their trading profits and can claim a capital allowance for the same. This can also be used for various expenditures related to converting space for commercial benefit, investing in research and development and other heads which can be diverted to boost production. Topics such as research and development are also encouraged by the government and SMEs can enjoy additional tax benefits on their investment in that sector. Many SMEs in the export-import sector are also eligible for paying excise duties.

To continue a long term business, any SME should be competent in its accounting. The services of a reliable and efficient professional is a must. Also, besides the proprietor’s tax returns, payroll taxes of the employees also need to be filed. Most of this information is filed on a quarterly basis and advanced filing always get some incentives offered by the government. Three kinds of financial statements are presented for the accounting which includes balance sheet, income statement and the cash flow control.

There is a famous saying, 'A stitch in time saves nine'. So, know your taxes, plan their returns wisely and harvest satisfaction & mental peace later.

Expert Speak: Mr. GK Pramod

Vitality of SWOT Analysis of Microlevel Enterprise

What is SWOT analysis of Microlevel Enterprise?
SWOT analysis of Microlevel Enterprise is to understand all the Strengths, Weaknesses, Opportunities and Threats and list them down among the four quadrants of a graph. After categorizing them, we have to convert the weaknesses into strengths, threats into opportunities and opportunities into strengths.

Importance of SWOT of Microlevel Enterprise

• This would help Microlevel Entrepreneur to understand about his organization.
• This would help to increase their confidence level.

Methodology for conducting SWOT Analysis 

Step-1: As a management expert, call selected microlevel entrepreneur to one place, and brief them about SWOT analysis of their organisation. 

Step-2: Ask them to think and list down all the strengths, weaknesses, opportunities and threats of their organization on a sheet of paper. This may require 1.5 to 2 hour.

Step-3: Organise a One-On-One discussion with these microlevel entrepreneurs to understand their organisational SWOT. Ask them questions as mentioned below:

• Why do you think these are your organization Strengths?
• Why do you think these are your organization Weaknesses?
• Why do you think these are your organization Opportunities?
• Why do you think these are your organization Threats?

  
Step-4: Facilitate entrepreneurs to think patiently so that SWOT analysis pertaining to their organisation becomes effective. 

Step-5: Ask them to make a presentation about his/her organisation SWOT. Allow them to analyze organisation SWOT.
 

Step-6: Convert organisation’s weaknesses into strengths, threats into opportunities and opportunities into strengths.

Case Study-1:

Charan Singh (Product Business):

Mr. Charan Singh is a Microlevel Entrepreneur from Jalandhar in Punjab. He sells fertilizers.

Details of Charan Singh’s business organization unit:

Here is the SWOT analysis of Charan Singh’s organization post a long One-on-One session with the expert:

 

SWOT Analysis of Charan Singh’s organization

Author’s Key Points:

• Be truthful to yourself when you do the SWOT
• SWOT is a very important activity
• CEOs/Growth Strategists should encourage microlevel entrepreneurs

The blog has been authored by Mr. GK Pramod, Co-founder, The Second Gear - MBA for Non MBA's Mentoring Module Concept.

To contact the author, e-mail at gk@tothesecondgear.com
 

Leave your comments and queries here:

MSMEs want Centre to offer access to sufficient credit: FISME

Indian Micro, Small and Medium Enterprises (MSMEs) have requested Centre to offer access to sufficient credit, which is important for survival and growth of SME production. 

 

The Federation of Micro, Small and Medium Enterprises (FISME) in the budget proposal to the Union Finance Ministry has stated that the venture capital and private equity funds are required by the SME sector to commence new ventures and surge the current ones.

The securitisation of trade receivables is likely be introduced to allow the bond market to develop and also lure funds in large volumes and at concessional rates in the interest of MSMEs.

Moreover, FISME has said that Non-Banking Financial Companies (NBFCs) can help to offer finance to the micro and small enterprises, but they are required to be actively boosted via supportive policies.

Read more: http://news.indiamart.com/story/msmes-want-centre-offer-access-sufficient-credit-fisme-156338.html

Manage Your IPRs

With the rise of human capital as the greatest asset, it’s now imperative for the Small & Medium Enterprises (SMEs) to understand the importance of Intellectual Property Rights (IPR). It is a kind of property that emanates primarily from activities of the human intellect. IPRs protect intellectual property by preventing infringement through patents, designs, trademarks and copyrights. The legal rights accrued on the intellectual property created are termed as Intellectual Property Rights (IPR).

What are IPRs?
IPRs have vital role to play due to global competition, high innovation risks, short product cycle, need for rapid changes in technology, high investments in R&D, production and marketing. There are various types of IPRs. The Trade Related Aspects of Intellectual Property Rights (popularly known as TRIPS) in the agreement of the World Trade Organisation (WTO) recognises seven forms of IPR, namely patents, designs, trademarks, copyrights, geographical indications, integrated circuits and trade secrets.

IPRs are largely territorial rights except copyright, which is global in nature in the sense that it is immediately available to all members of the Berne Convention. These rights are awarded by the State and are monopoly rights implying that no one can use these rights without the consent of the right holder. It is important to know that these rights have to be renewed from time to time to keep them in force, except in the case of copyright and trade secrets.

IPRs tend to have a fixed term, except trademark and geographical indications that may have indefinite life provided these are renewed after a stipulated time specified in the law by paying an official fee. IPRs can be assigned, gifted, sold and licensed like any other property. Unlike other moveable and immoveable properties, these rights can be simultaneously held in many countries at the same time. They can be held only by legal entities i.e., who have the right to sell and purchase property. In other words an institution, which is not autonomous may not be in a position to own an intellectual property.
 
Benefits of IPRs
There are myriad advantages of IPRs. Firstly, they prevent copying and imitation of your work. Secondly and equally important, they also save you money because you do not have to waste time and money on unnecessary investments related to R&D or marketing. IPRs helps in creating a corporate identity and enhances any company’s market value. They also give an edge to the firm and allows access into new markets.

How to attain a copyright?
An SME has to keep a record of all new innovations that are brought about by employees or the R&D wing of the company. These ideas could be goldmines of the future. Converting these ideas into IPs is a necessary step to safeguard it from being duplicated. Companies need to utilize written contracts which would register the IP to the company and introduce non-disclosure obligations on the staff and related parties from divulging the information or reproducing it. These can also be extended upon former employees from producing competitive products. 

Why invest in IPR?
While IPR might seem like a distant thought to you right now but it won’t be long before you realize how important it was. Realizing it before it’s too late is key. Understanding that an IP could convert into profits for your company is imperative. You could either benefit from practising the IP or by excluding other companies from using certain IP by gaining patent and copyright over that particular intellectual asset. Alternatively, the SME can license the IP and make monetary benefits from it. For SMEs, it is important for them to understand how to use IP to protect their inventions and brand. This is a great way to protect your innovations from bigger competitors who might use it if not protected properly. They might derive commercial benefit from your property, leaving you without any benefits.

If you are able to protect your brand and innovations with the right IPRs, you will be able to turn them into valuable business assets.

So get the inimitable advantage and make the most of your innovations by investing smartly and rightly in IPRs.

Expert Speak: Mr. GK Pramod

Know Yourself - SWOT Analysis of Microlevel Entrepreneur

What is SWOT analysis of Microlevel Entrepreneur? 

SWOT analysis of Microlevel Entrepreneur is to list down all his/her Strengths, Weaknesses, Opportunities & Threats among the four quadrants of a graph. Once we do this, we have to convert the weaknesses into strengths, threats into opportunities and opportunities into strengths.

Importance of SWOT of Microlevel Entrepreneur

• This would help microlevel entrepreneurs to understand about themselves completely.
• This will increase their confidence level.

Methodology for conducting SWOT Analysis
  
Step-1: As a management expert, have all concepts pertaining to SWOT clear at your end and come prepared with the expected Q&As. Call all selected microlevel entrepreneur to one place, and brief them about SWOT analysis.  

Step -2: Separate all entrepreneur. Make them sit, think and list down all the Strengths, Weaknesses, Opportunities and Threats about their individual personality on a sheet of paper. This may require 45 minutes to 1 hour. 

Step-3: After doing this activity, organise a One-On-One discussion of microlevel entrepreneur with them to understand their personal SWOT. Ask them questions like:

• Why do you think these are your personal Strengths?
• Why do you think these are your personal Weaknesses?
• Why do you think these are your personal Opportunities?
• Why do you think these are your personal Threats?

Step- 4: Facilitate entrepreneurs to think calmly so that their personal SWOT analysis becomes effective.

Step- 5: Ask them to make a presentation about his/her personality SWOT. Allow them to analyze his/her personality SWOT.

Step- 6: Discuss, analyse and brainstorm together to convert his/her weaknesses into strengths, threats into opportunities and opportunities into strengths.

CASE STUDY: 1
Charan Singh (Product Business):

Mr. Charan Singh is a microlevel entrepreneur from Jalandhar in Punjab. He sells fertilizers. 
                   
Details of Charan Singh’s business organization unit are:

His personal SWOT is as stated below:

Let us now do SWOT analysis of Mr. Charan Singh’s case study.
                          SWOT Analysis of Charan Singh

Author’s Key Points:

• Be truthful to yourself when you do the SWOT
• SWOT is a very important activity
• CEOs/Growth strategists, please encourage the microlevel entrepreneur to do a proper SWOT analysis

The blog has been authored by Mr. GK Pramod, Co-founder, The Second Gear - MBA for Non MBA's Mentoring Module Concept.

To contact the author, e-mail at gk@tothesecondgear.com

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Get Your Licenses Right Entrepreneurs!

The small and medium enterprises (SMEs) are accepted worldwide as the engine of economic growth. They help in promoting equitable development. High employment potential at low capital cost is the major advantage offered by the sector. The labour intensity of the SME sector is much higher than that of the larger enterprises.

SMEs constitute over 90 per cent of total enterprises in most of the economies and are credited with generating the highest rates of employment growth and account for a major share of industrial production and exports. They play a pivotal role in the overall industrial economy of India too. In recent years, the SME sector has consistently registered higher growth rate compared to the overall industrial sector. 

Grab your licenses on time

SMEs located anywhere in the world need to be registered with their concerned governments. They are required to register under the concerned act governing their existence. For example, in India, the agencies have to be registered under MSMED (Micro Small Medium Enterprise Act) 2006 which categorises SMEs as per the nature of activity. Enterprises can be registered as manufacturing, service industry. This grouping can be further divided as per the size of the firm as micro (investment upto Rs 25 lakhs), small (investment between Rs 25 lakh and Rs 5 crore) and medium (Rs 5 to 10 crores) enterprise. 

SMEs can register under MSMED Act and submit various documents regarding the market potential of the product, technology aspect, plant and machinery requirement, land and building requirement, among other things. Registering with the government provides SMEs with incentives such as credit guarantee scheme, priority sector lending, capital subsidy, reduced customs duty, power tariff subsidies, tax exemptions, etc. which can help them in saving on finances. 

Registration also confers an official status to the enterprise which can utilize it to get into mergers and partnerships with international firms. These firms also find the registered bodies trustworthy for expanding their business in newer markets.

Communication is Essential

Interpersonal communication can involve a wide variety of modes of communication including oral, written and other non-verbal forms. But the most common reference to interpersonal communication is the spoken form where the two individuals are sitting, face-to-face. Business organizations generally conduct such communication through staff meetings, formal discussions related to projects or services, employee performance reviews within the office. Other forms include client meetings, employment interviews or sales visits which are conducted outside the office.

Relevance of good communication
Interpersonal communication is necessary for any organization, especially for small and medium enterprises, which must supervise and coordinate with a variety of other organizations. It is inescapable and also irreversible. Communication, in any form, cannot be defined as simple. It is a complex process which cannot be reversed. It has a good chance of failing if not considered properly and it can also be confusing in many cases. Clarity is a must and care must be taken to keep it optimum. Maximum information also leads to maximum difficulties for the consumer. Also, interpersonal communication has a definite context. 

Let your customer know that he's important

Ways of communicating
There are different styles of interpersonal communication which can be classified as one-way or two-way as per the transfer of information. In a two-way communication, two or more parties are involved in a constructive exchange. Companies can apply both forms as per their requirement. While one-way communication refers to a more controlling and directive mode, two-way relies on a more interactive approach. Primarily, there are six types of communication adopted in business settings, namely controlling, egalitarian, structuring, dynamic, relinquishing and withdrawal.

Do it right with the customer
Conducting a successful form of interpersonal communication with the customer is necessary for any SME to progress. The disconnect between the customers and company can prove to be the biggest barrier in a company’s progress. Good communication ensures happy customers, efficiency in output, productivity and an unmatchable synergy within the enterprise. This form of communication also ensures that the company is made aware of the various modifications and improvements required in each of its various products. A good enterprise has to understand customer’s thoughts, feelings and grasp their situation better to respond to their needs and expectations with the company and its products.

The flaw of repetition
Repetition is another important aspect of effective communication as customers need to be informed correctly about the products and services of a particular enterprise. Useful details and necessary information needs to be imparted from time-to-time to the customers. Listening to your customer is a necessary part of the communication. Effective listening also involves understanding both verbal and non-verbal signs and intent of the customer. It also helps SMEs in responding in a more holistic manner to the customer.

As someone rightly puts it, interpersonal communication can be compared to a two-way street where on one side, the companies have to listen to customers and also speak in the right and responding manner to them. Communicating effectively also ensures a loyalty from the customers. After all, any customer would prefer an organization which dedicates its time in understanding his needs, which contributes to the rise of an organization.