Women entrepreneurs should be given fair representation in MSME sector, says Dr Rajnee Aggarwal, president, FIWE

Even though Indian population constitutes 48.1 per cent women and 51.9 per cent men, the entrepreneurial world of India is still a highly male-dominated field. Women empowerment is considered indispensable for achieving the goals of sustainable and inclusive growth. In an exclusive interview, Dr Rajnee Aggarwal, president, Federation of Indian Women Entrepreneurs (FIWE), explores the current status and opportunities available for Indian women entrepreneurs.

 

What is the current status of women entrepreneurship in India?

Dr Rajnee Aggarwal: The Indian social setup has been traditionally a male-dominated one. However, the traditional set up is changing in modern era. Women sector today occupies 45% of Indian population. The literary and educational status of women has improved considerably in last few decades. At this juncture, effective steps are needed to harness the economic potential of enterprising women in strengthening our economy.

Women entrepreneurship is growing at a rapid pace…more education and government initiatives to support entrepreneurship.

What is the role that your organization aims to play to uplift women entrepreneurs?

Dr Rajnee Aggarwal: As you know, FIWE is a national level organization with a large membership base of 15000 individual members/professionals sand 28 member associations spread across the country. We are also affiliated with International Federation of Women Entrepreneurs (IFWE), which has a membership base of 21 countries and more countries are being added soon.

Our main task is to promote entrepreneurship amongst women and bring them in the mainstream. As of now, women are not given a fair representation in the MSME sector whereas their contribution is consideration.

- Enroll women organizations for government schemes and incentives

- Get collective representation of women businesses on major forums, economic policy making, banking and funding. etc.

- Providing marketing platforms for products produced by women businesses. Give women businesses global representation

- Leadership training and advanced skill development programs of the highest standards to compete globally

- Provide opportunities for women to get them a level playing field

What are the current challenges faced by Indian women entrepreneurs? Please elucidate on the support and subsidy being given to them.

Dr Rajnee Aggarwal: Opportunities are immense. The knowledge economy has certainly created large number of never before opportunities for women particularly in service sector. Today one can see a women entrepreneur in almost every field be it ICT, retail, service sector, health care, insurance, tourism, education and even international trade. I keep meeting so many management and technology women professionals who are eager to take a dip in world of business.

There are many challenges faced by women entrepreneurs - start-ups or struggling to grow their existing business. Take for example, large number of women are not able to take advantage of Government schemes because they are not registered under MSME Act. Registration of a unit under MSME Act is not as easy as it needs to be. We are taking up this issue shortly with MSME Ministry and hope to make it easier at least for women enterprises. Easy availability of credit and at preferential interest rate for women entrepreneurs remains our long standing demand. We also find that at large women are not aware of women focused financial and non-financial schemes. Government should support FIWE to organize more of awareness seminars.

There are challenges for women, as women owned business are assumed to be inferior by stereotypical, male dominated thinking.

Earlier this month, Mauritius invited Indian women entrepreneurs to collaborate with their counterparts in various areas. According to you, how it can prove useful for Indian women entrepreneurs?

Dr Rajnee Aggarwal: We also plan to organize Buyer-Seller Meets and Exhibitions. FIWE is also organizing two, one in Delhi and another in Bangladesh with each event likely to see participation of over 1000 women entrepreneurs from across the world.

What steps state should governments adopt to draw more women into entrepreneurship?

Dr Rajnee Aggarwal:

- Increase the ability of women to participate in the labour force by ensuring the availability of affordable child care and equal treatment in the workplace. More generally, improving the position of women in society and promoting entrepreneurship generally will have benefits in terms of women’s entrepreneurship.

- Listen to the voice of women entrepreneurs

- Incorporate a women’s entrepreneurial dimension in the formulation of all SME-related policies. This can be done by ensuring that the impact on women’s entrepreneurship is taken into account at the policy stage.

- Periodically evaluate the impact of any SME-related policies on the success of women-owned businesses and the extent to which such businesses take advantage of them. The objective should be to identify ways to improve the effectiveness of those that should be retained. Good practices that are identified in this way should be disseminated and shared by all.

- Improve the factual and analytical underpinnings of our understanding of the role of women entrepreneurs in the economy by strengthening the statistical basis for carrying out gender-related cross-country comparative analyses and longitudinal studies of the impact of important developments and policies.

All the government bodies should induct women entrepreneurs on their boards, to generate gender sensitivity and create policies which are conducive for the growth of women entrepreneurship.

Recently, MSME Minister Vayalar Ravi highlighted the need to increase the share of women entrepreneurs to atleast 25%. How do you observe the scenario now?

Dr Rajnee Aggarwal: This is a very positive statement. As it has never been a political agenda, though women constitute almost 50 p% of our countries population But still no body is serious about it. Mr Ravi s statement shows that there is a leader who thinks in these terms. I am sure he will make some strong and workable schemes for women and draw a road map for women entrepreneurs.

Womens are found to be better managers as compared to men. Do you support this statement?

Dr Rajnee Aggarwal: Well, the topic of the GD is 'Do Women make good Managers'. Of course women do make good managers...

There are 'n' number of examples to support my view - Chandra Kocher, Hillary Clinton, Angela Markel, Indra Nooyi, Shiksha Sharma etc. etc.

Now as far as comparison between men and women is concerned, there has been a male dominance in the past 50 years for obvious reasons, which were due to cultural ethos which the world as well as India had. But this has now changed. Today no one cares whether the leader of a company/country/ group is a male or female. The world just wants effective and efficient leadership skills, which either way a man or a women possesses.

Higher EQ as compared to the male counterparts have helped women in achieving an edge. Women are versatile, flexible, agile and yet firm to handle the ever dynamic pressures and challenges of manpower management. The latest example of the Goan girl having an IQ of 162 , higher than that of Mr. Einstein is no surprise that now women are equally or more gifted than their male counterparts.

Please name the Indian states which offer an investment-friendly environment for setting up a business for women entrepreneurs. According to you, which region or state tops the count of women-owned enterprises.

Dr Rajnee Aggarwal: The top on the list is Andhra Pradesh and Karnataka. In Andhra first Industrial state for women entrepreneurs was stabilised way back in 1995.

Karnataka also was able to establish a marketing hub for women entrepreneurs The other states have not shown much interest in this area.

As per your opinion, after how many years will India be called as the hub of women entrepreneurs?

Dr Rajnee Aggarwal: Difficult to say. June 2012 Women Global Entrepreneurship study by Dell showed optimism from women entrepreneurs in India who expect median business growth of 90%, eliciting this response on India’s Economic Times from Amit Midha, Dell’s Chairman For Global Emerging Markets, “We have found the ideal country for a woman starting a business in 2012 could well be India.”

“In India, women and girls continue to be sold as chattels, married off as young as 10, burned alive as a result of dowry-related disputes and young girls exploited and abused as domestic slave labor,” Gulshun Rehman, a gender specialist and health programme development adviser at Save the Children UK, told the Guardian.

It makes you bewildered! To see this contrast.

The educational or professional gap between women is probably the answer.

Please share your roadmap for the current fiscal (2012-13).

Dr Rajnee Aggarwal:

- Conduct market research & demand potential for women entrepreneurs as alternate source of suppliers

- Successfully establish marketing linkages for women entrepreneurs – crucial input for their sustenance and growth. Focus on Networking is which is the biggest tool of success these days. Making them globally competitive and getting them level playing field by creating awareness.

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

Leave your comments and queries here:

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.

Challenges Faced by SMEs in Developing Countries

Small and Medium Enterprises (SMEs) are an integral part of any economy and play a vital role in supporting a stable economic environment. They are crucial in upholding the growth and existence of economy especially that of developing countries. SMEs are driven by combined efforts of private entrepreneurs, government and financial institutions.

Developing financial sensibilities
One of the key elements for an SME’s success is access to finance. In developing countries, SMEs face a number of hurdles while achieving the financial resources for building up of their businesses. Finance is crucial for any SME to acquire or absorb innovative technologies. Their expansion to global markets or association with other firms is also related to the availability of finance. Traditionally, SMEs find it difficult to avail credit or equity. Even maturities of commercial bank loans offered to them are limited to a very short period. Similarly, lower interest rates are extended to a very few companies.

SMEs are often considered to be high-risk borrowers because of insufficient assets and their vulnerability to market fluctuations. They are also very much susceptible to mortality. The existence of an information asymmetry caused due to lack of records in accounting and inadequate business plans often make them a difficult choice for creditors and investors. Also, the high cost of transaction or related administrative costs of lending small amounts make lending to SMEs a risky proposition. Even then, banks turn out to be the biggest supporters of SMEs. It has also been proven that banks would benefit commercially from lending to SMEs. 

Plan your finance and take the right ladder to growth

Find the right investors
Besides assistance from banks, SMEs can also rely on private equity firms which are experienced and expert in their businesses. They would prefer to invest in businesses which have a potential to grow. Many SMEs do not prefer such investments because of the interference by the equity firm members. However, there are certain investor firms who prove to be a viable option for funding as they use their own money for funding various initiatives.

Society has seen a new spurt of CEOs and successful entrepreneurs who are investing in new ventures and ready to support upcoming SMEs. These investors also provide their expertise to the firm and support them with their management skills. Bombay Stock Exchange (BSE) has already kick started its SME platform with the Rs 8.5 crore initial public offer (IPO) of a non-banking finance company (NBFC), BCB Finance. This has set high hopes for Indian SMEs who can now raise domestic capital for their own requirements through this way.

Alternatively, since SMEs have a bigger scope of getting their funds from banks, they can improve their credibility. Another solution offered is maintenance of better business plans, improved credit ratings and maintaining reliable financial information which would help banks and financial institutions in having more confidence in lending to SMEs.

SMEs can also go in for mergers with other firms to complete their fund requirements. Mergers also provide them opportunity to enter into international markets and form strategic alliances to expand their business and enter new productions. SME sector of any country is expected to drive the growth of any country’s economy and offer a significant opportunity for various investors to contribute in the future of a country.

Why SMEs should Opt for Inbound Marketing?

When you’re about to start a small or medium enterprise of your own, it’s important to make people aware of your venture and the products and services you offer.  Inbound marketing is the new marketing method that uses the latest technology to attract customers. This marketing method is opposed to the traditional, interrupting and less effective outbound marketing. This method uses the new strategy of reaching costumers by providing them precise and useful information reaching them according to their convenience. As traditional marketing is focused on finding costumers, inbound marketing is focused on the idea of getting found by costumers. So inbound marketing brings qualified costumers to the SMEs.

Next Gen Marketing
Inbound marketing is the result of some recent changes in the behavior of consumers. It does not involve the conventional and expensive methods of regular newspapers and television advertisements, billboards on roads and telemarketing calls. It is mainly based on three things--good content, Search Engine Optimisation (SEO) and social media.

The primary advantage of inbound marketing is its target audience which is all the persons who access the internet. A good content is the key to successful inbound marketing. Users will browse away from your page if they do not find the right information or get confused by the presentation. Similarly, SEO helps the consumer locate the site and its content. SEO practices, on-page and off-page, help SMEs in achieving a higher position in search engines. Search engines such as Google, Yahoo, Bing, etc. prove to be the first platform for a potential buyer or customer.

Social media networks form another important aspect in inbound marketing. Their range is spread across many channels where people browse on a regular basis. With a substantial sharing of the content, potential buyers are attracted to company's products or services.

Saves Time
A survey has established that inbound marketing, even though time consuming, costs 62 per cent less than outbound marketing or related efforts. It grows over a period of time and only improves in its quality. Also, with inbound marketing, one is directly connected to the target audience. In inbound marketing, one only approaches leads which are interested in the product and provides better chance for selling. It also works as a wisely investment, whereby SMEs can benefit from a long-term marketing strategy rather than a short-lived one such as print ads or video presentations, etc. The right investment on optimized content which can show up on various search engines confers a long lasting touch to the marketing effort.

Flexible Solution
Inbound marketing also offers a flexible solution to SMEs which can modify its campaign from time-to-time as per their requirement. Adopting closed loop marketing analytics from possible leads also helps SMEs to improve their marketing month after month. The system works much better than conventional e-mailing systems where the company has to spend quite an amount just to reach out rather than waiting for consumers to connect with them in the inbound marketing methodology. Often, these e-mails create negative publicity for the SME as the message is branded as a spam or unwanted forwards.

As a power pack of all these advantages, Inbound marketing could benefit SMEs in multiple ways making them more successful.

How to Generate Cost Effective Web Traffic?

Online marketing is slowly transforming the success scenario of many SMEs and providing them with new, potential arenas. It can greatly contribute in providing them with a larger status and put them in the same league of larger firms.

Website traffic can be increased by developing online partnerships whereby various concerns host each other’s web links and connect every user to the other’s web page and also advertise their own wares. The traffic can also be boosted by promoting search engine listings.

What Does the Customer Look For?

An SME needs to understand the way in which customers rely on search engines and the way they pick up keywords in a particular content. Search engines such as Google, Yahoo, Bing, etc. are potential platforms for customers, existing and new ones, to search for a particular product and service. They work as effective channels to guide users towards a particular site. One can choose between paid listings or organic listings as per their convenience. Generating back links or link building is vital for a website to have a higher position on the listings.

SEO or Search Engine Optimization is fast becoming a favored option for SMEs who are realizing the power of the World Wide Web. SEO involves the process of promoting the visibility of a particular webpage or website through unpaid search possibilities. Initially the search algorithms depended on information provided by the websites such as keywords which was later converted based on the keyword density. Presently, each search engine has their own criteria for listing a particular website. Many of them employ crawlers which browse across various pages of a website and seek out keywords and content elements. SEO can be planned according to the various kinds of search including image search, video search, academic search, news search, among others.

Where & Why to Invest

Many SMEs invest in SEOs as part of their internet marketing strategy and they are incorporated in their website design. SEOs are expected to bring optimum return on the amount invested. Search engines change their algorithms or search criteria and thus websites can suffer a loss in the visitor counts. Thus, SEO-responsive material needs to be updated from time-to-time. SEO could practically include a variety of materials including website designs, content management systems, videos, images, shopping carts, and elements which are programmed for search engine exposure.

SMEs can also boost the prominence of their web page by cross linking which consists of multiple links on various pages to bring the reader/user in connection with some important pages on the site.

Another form of ensuring free web traffic is the mode of free articles. An SME should publish a lot of articles which are themed along their products or services. They can involve their subject of expertise and offer their customers tips and guidelines which can make for an informative read.

You can also start a newsletter that can easily carry a variety of experts on the subjects together. The SME can be also part of online communities and forums where they can share their information and expertise with their potential customers.

So, be everywhere without shelling extra pennies and attract extra web traffic to your website.

NIESBUD partners with International Finance Corporation for MSMEs

The National Institute for Entrepreneurship and Small Business Development (NIESBUD), which is an autonomous institution under the Ministry of micro, small and medium enterprises (MSME) has collaborated with the International Finance Corporation, which is a member of the World Bank Group, for undertaking various projects in regard to entrepreneurship development in this country.

A memorandum of understanding (MoU) has been inked and NIESBUD will partner with the IFC in conducting training of the trainers (TOT) programme for boosting the training skills of the MSME trainers.

For more information: http://news.indiamart.com/story/niesbud-partners-international-finance-corporation-msmes-155248.html

The Merger Benefit for SMEs

The Indian economy is bubbling and along with that are the big players. Pleasantly, this time round a lot of SMEs are also joining the bubbly bandwagon. A primary reason for this growth is the way smaller enterprises are taking to business decisions like mergers and acquisitions.

The Pretty Picture
A burgeoning number of Indian SMEs are entering into mergers and acquisitions with various players from India and worldwide. The numbers have nearly doubled over the last two years alone. At this juncture, one needs to thoroughly understand the advantages of mergers for a particular SME. With a merger, an SME can acquire a greater set of resources for itself which can include manpower, machinery and other innumerable assets. In turn, this can boost its efficiency which can lead to an increase in its output and also lead to a reduction in the cost of producing a particular product or services. This reduction in the expenditure and improvement in the output can convert to better business growth for the enterprise. 

How Mergers Help
Mergers can help an SME in covering/removing its weaknesses in the long run. For example, any SME that is lacking in its R&D is advised to merge with an agency with strong R&D skills which can boost the productivity of both enterprises. Similarly, in the global context, mergers assist SMEs in penetrating new markets. Any Indian SME can also partner with agencies from foreign countries to facilitate retail for both their brands within India. Besides bringing a host of new technology and products into the country, it would also introduce better management, practice and culture to the agency. Both the agencies stand to gain from merger and it provides foreign SME with the know-how about Indian market and its demands for the coming times. Also, while SMEs go into mergers, they get into some fruitful partnerships regarding proprietary rights for products which can benefit the end user. IT sector is a clear example for such mergers where SMEs combine to offer a variety of products for the user. This also opens new markets for the SMEs and also contributes to innovation and propagation of a particular merger.

Reverse Mergers
In many cases, mergers also help SMEs in rising out of debt and works as effective exit strategy for many companies. Many SMEs can also enter into reverse mergers whereby a private company can merge with a public enterprise and form a public entity with a control exerted by the private company. With a reverse merger, private companies can exert better control on an existing public company and still run an enterprise with a public existence. There are a number of examples in India itself where an SME has acquired a larger status through its timely merger with another SME. Most of these mergers are found to be from the manufacturing sector although service sector is also joining in this process. The option of  leverage buyout financing and acquisition funding process which is supported by private equity houses prove to be some of the reasons for the sudden spurt in mergers amongst SMEs. Mergers prove to be one of the best ways for an SME to grow and expand. With the advent of globalization, it has become a more opportune growth for SMEs.  

Imperatives of skill development

Human resources are significant for the growth and development of SMEs and they should be managed well. It is extremely important to provide good training to employees. Every company has its own standards and so training employees is inevitable.  To save time and money, companies often tend to compromise on training of workers. It’s time to take this routine practice through a test.

Get the Industry In
Institutes are busy training people according to academia. It is time the industry steps in to tell the academia what they really require. Industries are now coming together with private universities to see how they can come together to develop a talented workforce that is employable. This has been a challenge so far and the attempts being made are few and far between.
 

Training on the Job
All leading companies train their workers because it is the single-most effective tool that has no substitute. Recruitment of the workers for white and blue collared ones is especially important and companies need to ensure that they are absorbed aptly into the company. Recruitment should be taken seriously and skilled HR capabilities should be employed to ensure right people are employed. 

Remunerating Well
People should be paid well and in accordance with their ability and skills. This not only ensures that they do a good job, it also means people stay with the company for a longer time. Of course, it is important to ensure that the person being recruited has a nice reputation and a good past record. Standards of recruitment should be high and competitive individuals should be given the right opportunities.    

What’s the Big Difference?
Say a company has sources technologically advanced machinery, but if the workers are not skilled and trained properly then the machinery would lie unproductive. So training of the employees is a must. They should go through training to hone their skills and to improve their performance. 

Human resources are the most powerful investment for any company. The workers should be managed intelligently and work should be assigned as per their capabilities. They should be encouraged to perform well for better productivity for the company and greater success for the person. Dedicated and hard working employees should be rewarded and they should be promoted with time. The training method should be interactive so that the employees can share their problems with the head. 

Unskilled workers are the biggest hurdle for the growth of a company. Therefore, they should be trained to generate more output and to meet their targets in a minimum time. The skilled work force tends to be more efficient and thus contributes in a big way to the advantage of the firm. Good workers add to the reputation of the company. It should be kept in mind that the employees who are given a healthy working environment are your biggest assets. 

Intelligent management of human resources is the key to success. A team of experienced and new workers should be engaged so that the freshers can learn. The leader should have a positive attitude to inspire workers to perform better and to the best of their ability. Adequate channelizing of resources makes it possible to reduce wastage and to raise turnover. So, skill development is crucial for the success of SMEs and a must-do for a productive tomorrow.

Get More with Social Networking

This is the age of the internet. With the technological boom, the internet has become an important marketing tool to augment sales. Social networking sites have become indispensable in this regard as there are 120 to 800 million users of these sites. You can market your product on popular social networking sites like Facebook, Twitter, My Space and Linked In. 

Attention Seeking 

It is important to grab the attention of the consumers and since a large mass of people are into using the social networking websites, you can capture a large amount of audience by targeting any of the generally famous social networking websites. Come up with a unique profile logo so that the customers can recognise your brand. You can make your profile interesting and attractive keeping in mind the recent trends.  

Interactive Medium 

Social networking sites are one of the most interactive mediums which can be used to communicate with the customers, as these networking sites provide the entrepreneurs with a common platform for communication with their customers. You can know customers’ responses and provide them with products according to their convenience. It is an easily accessible medium; with just a few clicks of the button, customers can access information about your product. It is important for you to keep your site updated and customer friendly. Keep posting the latest information about the product on your site. It has become crucial to analyze the new trends through this innovative socialising medium and act smartly to enhance the sales and maintain healthy relations with the customers.
 

Cost effective
This kind of marketing is cost effective and fast. You can invest once and then reap the benefits for a long time – unlike media advertising. It is extremely fast because internet marketing has brought the world to the fingertips. It is with just a single click of a button that customers can learn about your product. 

Targeting customers  

You can target your customers through this medium; this is not possible by advertising your product through other means such as the print and broadcasting media. It is important for you to know the type of audience that you can target and then build a community of potential customers. One needs to keep in mind that online marketing is markedly different from offline marketing. Offline marketing means the solutions seeking the people while the online marketing involves the people seeking the solutions. So the marketing should be planned accordingly.
 

Global market

Social networking sites offer you a global platform to advertise your product. The social media provides a fair opportunity to have unlimited exposure. It has no clearly demarcated periphery and you can expand your horizon. Your product gets more exposure thus incrementing your sales. It can have a global presence and the world becomes a single market.  

If you own or run a SME then social networking sites are the best mediums to promote your product. In a scenario where everyone is seeking cost effective options nothing can be better than launching your product through this fastest growing medium. In the era of cloud computing, it is prudent to choose social networking sites to handle the global competition.

Cheer Up Your Buyers with Online Promotions

The internet has become a fast-growing medium of promoting your product online. Information on attractive offers and discounts can reach customers at a faster pace via internet. It is possible to inform people about discounts and offers through social networking sites such as Facebook, Twitter, MySpace and LinkedIn. This has emerged as the best medium to reach out to millions of people. In fact, it has been estimated that there are around 100 million internet users in India itself. So, for the Indian SMEs, there could be nothing better than promoting their brands through internet. 

Time It Well

 
It is important to keep in mind that discounts are not to be given throughout the year as people start undermining the product then. They should be scheduled for special occasions such as during a festive season like New Year or Diwali. Discounts can be offered depending on the product. These offers and discounts are a must to gain a competitive edge in the market, but the time frame is also an important factor. 

Internet marketing makes it possible to remain in touch with the customers through emails and to notify them about special discounts and offers. It is crucial to realise that emails have always been and still are the most powerful marketing resource. You can also target customers that your firm would like to extend discounts to; this is not possible by advertising via television or through magazines. Companies can personally reach out to their customers through emails. They can manage their contacts but need to be careful not overdo it as this might lead the customer to discontinue receiving their correspondence. To make the advertisement more appealing, it helps to hire a good copywriting firm to frame customer friendly content for the website. Such professional copywriters could also make the content more search engine friendly. Individuals are more likely to become loyal repeat customers through positive online engagement. In the case of television marketing, consumers are passive recipients of the product. Such discounts reach your customers through the internet at a faster speed and you can also get their responses within few hours; an experience which seems next to impossible with television or print advertisements.
 

Viral marketing plays a crucial role in informing customers about the discounts. The company just has to update its website with details of the latest offers. All this costs a miniscule amount, unlike the conventional advertisements viz. magazines, newspapers and television where you would have to spend a fortune. Moreover, this is the most hassle-free method of marketing.
 

Offers and discounts play an important role in augmenting sales. This entails that the medium of communication be a fast paced one, in order to meet the demands of the present generation. 
 

Cost Effective Medium

It is significant for SMEs to realise how they can cut their costs in the regressive market conditions. Internet marketing proves effective in saving a lot of expenses incurred on advertising through the usual modes such as television and print. In fact companies can reach out only to a limited audience through these conventional mediums. On the other hand, internet marketing is growing by leaps and bounds because of its effectiveness, and it is quite obvious that it will soon outgrow television and print advertising viz. newspapers and magazines due to large number of people hooked on to the internet. Unlike the other modes, it is a cost effective medium and has a mass appeal. A company can expand its horizon through internet marketing and not have to remain confined to just a region or a country. The traditional mediums have a limited circulation and earmarked areas; the internet offers unlimited exposure. Anyone at any time can check the company website and learn about its product.
 

People usually look for information of a company on internet and so having an internet presence really makes a difference. It is important for the SMEs to understand that online marketing is the most important medium to boost their sales. The conventional promotion mediums require payments time and again but internet requires only the creation of a website which has to be regularly reviewed. If need be, a company can also make judicious use of internet by establishing a profile on social networking sites such as Twitter, Facebook and MySpace. It provides a platform to connect with new people and develop brand loyalty. Companies can maintain good personal relations with their customers and address their problems. All this can really help SMEs to win the confidence of their consumers. With a minimal cost, the company can be effective beyond imagination. A firm can also opt for other dynamic mediums such as viral marketing, blogging and podcasting. Increasing interaction with the customers can greatly help in generating sales. You should not miss out on getting your company listed in the several online business directories so that your firm can easily be traced by customers. This is an extremely convenient means to establish your web presence.   

Era of Marketing

There are 70% customers who trust online reviews. So you can aim towards gaining such online customer reviews, which, if positive, can benefit your company tremendously. There are over 100 million internet users in India itself, a fact which depicts the popularity of the medium. It is a good idea to conduct research and get in touch with the niche audience; this helps in framing an advertising strategy and boosting sales.
 

According to reports, India is home to an estimated eight million SMEs of which about 400,000 have a website and 100,000 have an active online presence. Internet marketing is flourishing and it is visible. A defined market strategy helps to attract the audience and create a profile for each segment. It is helpful to analyse customers’ problems and offer solutions after understanding their psyche. Make use of popular keywords to attract them. Make use of analytics to trace the customer’s response and direct yourself to the particular audience. This can help you to decide your future course of action. You should focus on increasing the internet traffic towards your company website to acquaint the people about your products.
 

In this new era of marketing, nothing can be more cost effective than internet marketing which has already begun to dominate the traditional methods of advertisement. Internet opens up endless opportunities with minimal investments. Maximise your sales with this innovative technique.

Government to hike investment cap in MSMEs

Medium Small and Micro Enterprises (MSMEs) play a vital role in the industrial development of a nation. A MSME is crucial for gratifying various socio-economic objectives, such as higher growth of employment, output, promotion of exports, besides being an instrument for alleviating regional disparities and fostering entrepreneurship. Indian MSMEs have been exposed to intense competition due to the accelerated process of globalization and this increment would provide better capital and help the firms in facing adverse market competition. The government has hiked the investment cap in MSMEs after a gap of five years by revising investment limits for classification of industries. This signifies a significant step for MSMEs because interest rates and costs have been rising consistently due to the ever-increasing inflation. The investment cap is also likely to be linked to inflation so that the industry does not have to depend on periodic revisions and they can scale up, as and when required. 

As recently reported by The Times of India, currently any unit in the manufacturing industry with an investment between Rs 25 lakh and Rs 5 crore is classified as a small enterprise, while units with an investment of Rs 5 – 10 crore are classified as medium enterprises. In case of services, the limits are lower, given the lower capital requirement in the sector. Earlier the small scale industry was not clearly charted out but now with the changed investment cap, the government has defined the micro and medium industries. This major hike will affect 2.6 crore micro, small and medium enterprises and will improve the credit flow to the sector.

This should be a fruitful decision because it would give a boost to the economy of the nation and the profits of the MSMEs. It would affect development and growth rate as it would employ six crore workers. This would significantly raise the manufacturing output by 45% and there would be an increase of 40% in exports to other countries. On the whole, this review would have an incredible impact on 2.6 crore micro, small and medium industries.

This plan is still in the pipeline as the government would consult the MSMEs before taking a final decision. Nevertheless, the investment hike would be a big thing as this would affect the country’s development. While the earlier mandate requires the government to procure 20% from MSME units, it is now going to change. Earlier, multi-brand retail chains were required to source 30% from MSMEs; this plan too has been put on hold.

The sector would wait to hear on what is going to be the future for MSME units who are continuously struggling with bad credit, poor facilities and lack of government support.

ET NOW-IndiaMART Leaders of Tomorrow Award to Highland Holiday Homes under Travel & Hospitality Category

When the time and tide were against him, it was Mr. Devadas Y. Naik's (Chairman, Highland Holiday Homes (Goa) Private Ltd.) perseverance, hard work and right attitude that converged eventually to overturn them and emerge a winner. What better an acknowledgment for this victory than India's most prestigious awards for MSMEs - ET NOW-IndiaMART Leaders of Tomorrow Award 2011. He was conferred with this award being the best MSME under Travel and Hospitality category at the recently held Awards Ceremony. Mr. NR Narayana Murthy, Chairman Emeritus, Infosys Technologies, an inspirational figure for the entire Indian business community, congratulated Mr. Naik on this well deserved feat.

Ecstatic on being adjudged Leader of Tomorrow, Mr. Devadas Y. Naik, said, "This was the most challenging of all the awards I have won in the recent past. The elimination rounds, the rigorous implementation of rules to level the playing field, explaining my innovation and getting the attention of juries from the cream of the corporate world was a unique experience. It gives me further impetus to continue the growth trajectory I am following with Team Highland. Be warned: more innovations follow..."

Mr. Naik started out with a dream to create wealth. Since then, it has been a roller coaster ride for him experiencing acute lows and steep heights during the journey. He began with running a successful inter-state tea and coffee blending business, saw it fail when the USSR broke up and the big players flooded the Indian market with their products. He had to start from the scratch all over again but this did not discourage him and he opted for real estate, construction and hospitality. Eventually, he owned a marvellous Highland Beach resort in Candolim, Goa, which brought his dreams to life and won the prestigious ET NOW-IndiaMART Leaders of Tomorrow Award for him.

Mr. Naik's journey is just one of the numerous inspiring tales at 'ET NOW-IndiaMART Leaders of Tomorrow Awards 2011', India's leading platform that acknowledges the efforts and achievements of the Indian MSMEs. The opportunities are lurking and waiting for all aspiring entrepreneurs to grab. With this platform, it is the time to prove the metal and mettle to the world.

Sweet success for Hosmac India Pvt. Ltd. at ET NOW-IndiaMART Leaders of Tomorrow Awards 2011

With another feather of appreciation added to his hat of success at the felicitation ceremony of 'ET NOW-IndiaMART Leaders of Tomorrow Awards 2011', Dr. Vivek Desai, Managing Director, Hosmac India Pvt. Ltd. is now doubly charged up to establish his company as the top notch healthcare consultancy across the globe. Hosmac stood meritorious and ranked number one under the Healthcare and Biotech Category at the Awards. Mr. Desai was bestowed upon with the award by Mr. NR Narayana Murthy, Chairman Emeritus, Infosys Technologies, who congratulated him for his entrepreneurial efforts in setting higher benchmarks for healthcare consultancy in India.

Excited after winning the award, Dr. Vivek Desai, Managing Director, Hosmac India Pvt. Ltd., said, ”The award means a lot to our organisation especially due to the unique model of our business. We have grown over the past 15 years to become Asia’s largest healthcare consulting firm and this award recognises our effort and would enable us to move further into the market. With the industry growing at a very fast pace, this would strengthen our leadership position in India and also help our footprints outside India.’

Dr. Desai followed his entrepreneurial instincts and founded HOSMAC in 1996, which now has a dedicated pool of highly qualified professionals from various facets of Healthcare Consultancy and Design. A renowned name in Hospitality & Management field in India and overseas, he is a visiting faculty to premier institutions like Tata Institute of Social Science, IHMR Jaipur, IIT Mumbai, Indian School Of Business Hyderabad, All India Institute of Local Self Government, etc. In his successful career of over a decade, he has not only advised more than 400 hospital projects in areas of feasibility studies, market research, hospital planning and management consultancy in India and abroad; but also served as an advisor to numerous multilateral agencies like the World Bank, UNICEF, WHO, IL&FS, Ministry of Health and Family Welfare etc.

The healthcare sector is evolving in India demanding more and more such entrepreneurs who have a knack of it and could explore its vast potential. All it demands is entrepreneurs and leaders like Mr. Desai who do not sit at the shore but chase their dreams and dive deeper in the ocean to discover the pearls of success.

Sequel Logistics Bags ET NOW-IndiaMART Leaders of Tomorrow Award

While India is aiming to become the economic superpower, the supply chain management companies are acting as a catalyst to accelerate the growth process and perpetually strengthen the logistical backbone of the nation. Recognising the feat of such behind the scene heroes, 'ET NOW IndiaMART Leaders of Tomorrow Awards 2011' felicitated Mr. Sujoy Guha, Director & CEO, and Mr. Sharad Jobanputra, Chairman, Sequel Logistics Private Limited, with this prestigious award under the Transport and Logistics Category. Mr. NR Narayana Murthy, Chairman Emeritus, Infosys Technologies, congratulated them while giving away the award on their persistent efforts and commendable work.

Exhilarated at holding the award in his hands, Mr. Sujoy Guha, Director & CEO, Sequel Logistics Private Limited, said, “It feels great to win such prestigious award and be recognised by our peers, industry and the business community, in general. Sequel Logistics is proud to be a catalyst in this country's growth story, working across all other industry verticals - acting as a common thread and contributing to their overall development. We have built our business model on a platform of trust, integrity and continuous innovation, which now has been endorses by this award. As Team Sequel, we now have the responsibility to act as a leader in our field and continue adding value to our esteemed Customers.”

A Mechanical Engineer from NIT Calicut and a Post Graduate from Warwick University of UK, Mr. Guha has a wide industry experience of 27 years with one of the leading brands of the logistics sector. The rich experience paid off really well when he joined this venture, Sequel Logistics Pvt. Ltd., in the year 2010. The company specializes in providing comprehensive supply chain management solutions, services & products in 'Critical Sequel Logistics'.

The journey of Mr. Sujoy Guha has just begun after winning the ET NOW-IndiaMART Leaders of Tomorrow Award as he has to set higher goals for his company and achieve them. The leadership standards which he has set now welcome others to follow.

Expert Speak: Mr. Nandan Sharma, TATA Communications

MPLS - The Gen-Next Intelligent Networking Solution for SMEs

Small and medium enterprises (SME)s today leverage the power of technology to ‘go global’ and stay connected with associates and clients ‘24x7’. In this age of globalization and localization or as we say “glocalization”, small enterprises need to conduct bulk of their business over the internet and in a secured manner.

There are multiple options, but the best suited is the Multi-Protocol Label Switching (MPLS), the networking system that is reliable and secure for national and global connectivity. What makes MPLS the most sought after technology to deliver voice and data services for small enterprises? It is mature, sophisticated and delivers voice and data services faster. MPLS provides faster packet forwarding for IP routers and supports Virtual Private Network (VPN) services with traffic engineering and network convergence.

In addition, by virtue of its performance and versatility, MPLS offers lower network total cost of ownership (TCO) than any other solution.

Now, as a SME business, would you not want a fully managed solution that helps you streamline your business operations more efficient? MPLS not only provides you with cutting edge technology with ample capacity for future expansion but also offers cost-effective scalability across multiple locations. After all, you do not want to spend a fortune on your network infrastructure.

But it is not just costs, in this age of cut-throat competition among businesses in all domains, SMEs always need to improvise and enhance product or service in order to carve a niche in the market.  We understand that you need to concentrate on your core competencies instead of struggling with high-end technologies and networking system. 

MPLS networking service provides you with a fully managed solution for all network and connectivity requirements along with supporting business critical applications. MPLS service thus is the key for you to get an edge over your competitors.

The contributor for this blog is Mr. Nandan Sharma, Product Head, Network Services, Tata Communications-SME (http://www.tatacommunications.com/sme/mpls.asp)

RBI asks Banks to acknowledge, streamline MSME loan applications

The Reserve Bank of India (RBI) has directed the banks to compulsorily acknowledge all the loan applications, submitted either manually or online, by the micro, small and medium enterprise (MSME) borrowers. 

 

The central bank has issued the directive after receiving complaints from industry associations/ chambers that banks have not been acknowledging loan applications. The banks have been asked for ensuring that a running serial number is seen on the loan application form and also on the acknowledgement receipt. 

Moreover, the banks are strengthened to commence a central registration for loan applications, said RBI. The same technology is expected to be used for online submission of loan applications for enabling online tracking. 

For the micro enterprises, the simplified application-cum-sanction form, printed in regional language, needs to be unveiled for loans up to Rs 1 crore.

For more information, click: http://news.indiamart.com/story/rbi-asks-banks-acknowledge-streamline-msme-loan-applications-153008.html

Expert Speak: Mr. GK Pramod

Sustain 'Sustainability' for elevated growth in business

To achieve top-line growth and bottom line results, sustainable business growth strategy is the practical approach. Preferably, the Indian SMEs should embrace sustainability to optimize their operations enabling enhanced overall performance.

While we delved deeper on 'Scalability' in the previous blog, it would be equally interesting to touch upon 'Sustainability' – the second 'Sutra' of business growth.

The Business Growth has to be Sustainable. If there is no sustainability in the Business Growth, it becomes very difficult for a Microlevel Entrepreneur to survive.

Sustainability
If a Microlevel Entrepreneur is able to maintain the business without affecting the quality of the product/service, with consistency in increasing turnover and profitability, such an attribute is called Sustainability.

Importance of Sustainability

• This is an important parameter for a Microlevel Entrepreneur. If there is no Sustainability, he/she may have to completely close down the business unit.
• However, large business organizations can still survive with one wrong step forward, but a small Microlevel Entrepreneur has to be very careful.

Do’s

• If you are a Microlevel Entrepreneur, be very clear before expanding your business whether you will be able to survive even after the business expansion.
• Prepare a detailed excel sheet summarizing all the revenues and expenses of the new unit. This would give you a clear idea.

Dont’s

• If the expansion of the business doesn’t promise to provide Sustainability, please do not expand.

Case Study
We will discuss a case study of Ms. Usha who is Microlevel entrepreneur from Mysore. Ms. Usha sells natural fresh juice.

The details of Ms.Usha’s business organization unit are as  follows:

1) Name of the entrepreneur:        Ms.Usha
2) Name of the organization:         Sushruta Fresh Juice Centre
3) Nature of business:                   Sale of Natural fresh juice juice            
4) Details of turnover details for past 3 years:

Analysing the sustainability factors for Ms. Usha’s business (Product Business), we have the following observations:

• Ms. Usha’s business is sustainable because she is able to deliver the same quality of juice in all the juice centers run by her.
• She is manufacturing the juice in one centralized location, thereby reducing the cost of production.
• She is running each of the juice centers as a profitable business centre.
• She has a common production Machine, Production staff, Marketing staff, Finance staff and HR staff for all the juice centers. This makes her business more Sustainable.

Challenges in Sustainability

• Uniformity in production and packing packing.                            
• To create awareness among their customers that natural fresh juice will provide good health.

To my belief, practicing the three 'Sutras – Scalability, Sustainability and Profitability', would lead your organisation towards business growth. Wrapping up the detailed discussion here, we would learn about profitability in our next blog.

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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