India's handicraft exports climb 17.5% to $2.7 bn during FY12

Country's handicraft export advanced by 17.56 per cent to $2.7 billion during the financial year 2011-12 as compared to the same period in 2010-11, as informed by the nodal body of handicraft exports today.

 

The country witnessed the growth despite the sluggish demand in major importing markets like the US and Europe. 

The US and Europe together account for more than 60 per cent of the country's total handicraft exports. 

During the financial year 2010-11, the exports stood at $2.3 billion, as per the figures of the Export Promotion Council for Handicrafts (EPCH). In the last fiscal, the growth was mainly driven by growing demand in new markets like China and Latin America. 

Read more on: http://news.indiamart.com/story/indias-handicraft-exports-climb-175-27-bn-during-fy12-158365.html

Govt's five major schemes push for SME growth

Micro small and medium-sized enterprises (MSMEs) play a vital role in the growth of a nation. It is often said that small units are highly responsible for driving innovation and competition in various economies. Presently, the sector is accounted for 17 per cent in Indian GDP, which is expected to grow to 22 per cent by 2012.

Indian economy gets 45 per cent of manufacturing output and 40 per cent of exports from the SMEs as per the ministry estimates. Not only this, the sector employs 60 million people, creates 1.3 million jobs every year and caters to both national and international markets with the production of more than 8000 quality products.

Having been the key growth driver of the country economy, the MSME sector lacks the required cooperation from the government which in turn confines the growth of the sector in the domestic and global markets.

However, there is a slew of government schemes and sops offering enhancement and support to the business activities of the small units, but a majority of small traders fail to avail them due to lack of mindfulness and awareness about the schemes.

Here are five key financial assistance schemes being offered by the government to intensify the growth of the small scale units.

1. Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGMSE)

The Ministry of MSME and Small Industries Development Bank of India (SIDBI) have instituted a trust named Credit Guarantee Fund Trust Micro and Small Enterprises (CGTMSE) for the implementation of Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGMSE), which was formally launched on 30th August, 2000 and became operational from 1st January, 2000.

The scheme is aimed at providing collateral-free credit to both existing and new micro and small enterprise (MSE). The plan covers term loans and working capital facilities of up to Rs 100 lakh per borrowing unit and can be prolonged without any collateral security or third party guarantee to a new or existing MSE.

In case those units covered under this scheme go sick due to the factors beyond their control, the scheme also allows the lender to stretch the rehabilitation assistance. If the credit facility surpasses Rs 50 lakh, it may still be covered, but the guarantee cover will be extended for credit assistance of Rs 50 lakh only.

2. Credit Link Capital Subsidy Scheme for Technology Upgradation

Credit Linked Capital Subsidy Scheme (CLCSS) provides technology upgradation assistance to the SMEs primarily in the small scale industries (SSI). All entities, including sole proprietorship, partnership, cooperative, private and public limited companies, are eligible for the scheme.

The maximum limit of eligible loan for SMEs under the scheme is Rs 1 crore. It comprises a subsidy rate of 15 per cent.

The scheme was first launched in October, 2000 and was revised in September 2005. Under the revised scheme, the admissible capital subsidy is calculated with reference to purchase price of the plant and machinery.

3. Mini tools room and training centre scheme

In an endeavour to assist the manufacturing sector, the Government of India provides assistance to the state governments in setting up the tool room facilities, the backbone of the manufacturing sector as they create dies, tools, moulds, jigs, fixtures, gauges and precision components which are the essential elements for the operations of the production units.

Read more on: http://news.indiamart.com/story/govts-five-major-schemes-push-sme-growth-158127.html

Is lending a good idea for MSMEs?

As a Micro,Small & Medium Enterprise (MSME) head you would be worried for options every time you plan for expanding the business or conducting new processes in the organization. These MSMEs are one of the most important contributors in employment generation, promotion of entrepreneurship, wealth distribution and backward area development in India. However, they face a lot of hurdles due to their limited resources in manpower, finance, infrastructure and reach in the market. So where can the MSMEs generate or borrow funds from?

A Mix of Challenges and Opportunities
MSMEs face competition both from internal as well global competitors in times of globalization. Investments in technology & innovation often vie for an extra investment which needs to be provided from time-to-time. Having an extra amount for expansion and development could be a vital difference in the company’s future. There are a number of capital lending agencies working in India which could include banks, financial institutions, private investors, money lenders, etc.

How to approach these Agencies
Traditional finance agencies such as banks rely on documented sources of information, interviews, visits along with the knowledge and expertise of the individual managers in assessing and monitoring a certain business.

While approaching a lending agency, a good credit rating, secure financial statements and stable collateral could work towards your advantage. Many small business lenders often rely on personal credit history of the proprietor while giving the loan. So, the conditions can vary amongst various lending agencies. Risk assessment in a MSME varies greatly from a bigger company as the owner’s assets can also be listed as part of the SME. They often operate in the informal manner and thus listing their financial history can prove to be quite difficult. Keeping a strong financial process within the enterprise could benefit you in getting easy finances. Some lending companies may also demand for shares in your enterprise or prefer an internal agreement for a percentage of the company profits which can be negotiated at your end depending upon your need for the money.

With the advent of credit rating, getting your enterprise rated would also prove to be a good move. The credit rating agencies often have a list of banks and financial institutions on their panels. Getting a good rating would automatically make you eligible for a loan and that too at a reduced interest.

All’s Going Well
Today, as a MSME you have a better chance to avail finances with the launch of the new SME Exchange. You can enlist the organization on the Exchange and avail equity from the market. The latest budget has also provisions for an exemption on capital gains tax for property sales which are focused towards investments in MSMEs. The government has also set aside 5000 crore rupees to establish an India Opportunities Venture Fund along with SIDBI to offer easy equity to MSMEs.

One has to understand that companies such as Microsoft also started as a typical MSME and have reached an important milestone of being the richest enterprise presently. MSMEs can easily collaborate, merge and develop into larger organisations without much complications regarding documentation and thus prove to be perfect vehicles for instant growth. Thus, a gap in financing should be the last problem on your list with a variety of options for you.

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.

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

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.

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. 

Brand Building via Crowd Sourcing

Small & Medium Enterprises (SMEs) are prime players in any economy and its progress in a big way. Yet, many of these enterprises often abstain from brand building exercises. Industry experts attribute this absence to lack in infrastructure, capital, management, among other things. Often, SMEs are found busy in making products rather than branding or marketing them to their consumers which could often push them back in the competitive market.

Creating an identity
Branding prepares an exclusive identity for an SME and prepares it for competition in adverse marketing situations and also cements a strong connection with their customers. One needs to understand that potential customers recognize brands through a variety of media including visual communication (logos, colors, imagery, etc.), communications (websites, brochures, sales representatives, etc.), and behavior (relationships with customers, partners, employees, government, society, etc.). Also, in case of SMEs, branding could very well refer to their specific products and services which need to adhere to certain levels of quality. Brand refers to the way the customer knows the company and its business. Within the company also, interactive workshops and training sessions need to be conducted to apprise them about the brand.

It helps the customer in differentiating its services and makes the SME exclusive in its audience. It also supports the organization in generating a positive image and also contributes to the healthy growth of an organization. It also helps SME in connecting with future clients and build future associations. They also play a vital role in consumer decision making process as loyal customers often stick to their preferred brands.

Using technology to our benefit
Modern technology also offers SMEs a wide variety of choices to boost their customer base by brand building across various media. SMEs can organize a wide group of people to perform their special tasks related to branding and marketing which were earlier performed by specific individuals. The process termed as crowd sourcing is gaining popularity and is preferred choice for many brand marketers.  

While crowd sourcing is beneficial, it's important to do it right

With social media on the rise, brand building exercises have to be more intensive and planned in their execution. Once the branding is achieved, SME can benefit from its goodwill. With their limited resources and limited budget, 'crowd sourcing' can be a viable solution for many companies.

Crowd sourcing campaigns need to be planned carefully or it can prove to be a big disaster for the company. One needs to be precise in their brief because once the information is transferred, it travels to further customers in the way it was published before. There is no room for errors. SME should also be open to offer incentives to the customers who may be attracted to a particular company because of the prizes offered. The customer also needs to be assured that he is not overwhelmed with company’s promotion drive which may also result in a negative impact. 

Crowd sourcing offers innumerable ways of promotion and one needs to be precise in their choice. Even though it involves a wide range of consumers but the process needs to be treated in a professional manner.

'Buyer Seller Meet' - A platform by IndiaMART.com for SMEs in Healthcare sector to Network & Grow

The medicine and pharmaceutical industry in India is truly cutting edge. It has seen plethora of advancements in the past few years. Messe Duesseldorf India Pvt. Ltd. endeavors to constantly remain in the forefront of the changes, sweeping advances in the field. In association with MEDIC and IndiaMART.com, India's largest online B2B marketplace, as its online media partner Messe Duesseldorf has put its best foot forward with the support of Indian associations such as AIMED (Association of Indian Medicals Device Industry) and IAPMR (Indian Association of Physical Medicine and Rehabilitation), as well as vital international institutions to bring the medicine and pharmaceutical industry under one roof at Bombay Exhibition Centre (BEC) in Mumbai via 'Medial Fair India 2012'. 

But, what actually would interest the Small & Medium Sector Enterprises (SMEs) of healthcare sector here will be the 'Buyer Seller Meet' which IndiaMART.com will be organising in partnership with Messe Duesseldorf India Pvt. Ltd. Before delving deeper on what this meet has in its store for Indian SMEs active in healthcare sector, lets get acquainted with Medical Fair India 2012.

A Curtain Raiser
Medical Fair India 2012 will provide an interactive platform for the entire medical fraternity to gather under one roof and celebrate the technological advances in the field of medicine. It is a three day celebration of diagnostics, medical technology, rehabilitation, medical equipment and components. In fact, such a meeting is much more than just a scientific interaction. In addition to facilitating the exchange of expertise and knowledge, the fair provides an invaluable opportunity for the sellers to exhibit their equipments to the buyers.

It is anticipated that over 311 exhibitors from all over Asia, Europe and USA will attend the event showcasing the technological advances equipments and health care products to more than 5000 visitors. This event will also witness footfalls of entrepreneurs from various SMEs across the sector apart from industry leaders. As a matter of fact, for the very first time in the history of medical fairs in India, there will be a US pavilion with the Illinois State Office, the Minnesota State Office and the US Commercial Service participating, as well as group exhibitions from the Czech Republic and Japan.

Upholding Traditions: Where Buyers Meet Sellers
Partnering with Messe Duesseldorf, IndiaMART.com will organize a 'Buyer Seller Meet' alongside the fair. This meet will provide an exclusive platform to buyers who will come with their specific requirements and sellers who will showcase product samples of their respective companies. IndiaMART.com will make arrangements for pre-fixed meetings between buyers and suppliers of medical products as well as it will ensure that every buyer gets to meet multiple numbers of suppliers. The objective of this meet is the cultivation and promotion of various businesses across the field of medicine, creating prospects for exchanging of views on the development in instrumentation, establishing contacts and face to face meeting with prospective buyers. This meet not only gives a golden opportunity to Indian SMEs in healthcare sector to explore a whole new world of healthcare products & services but also a perfect platform providing enormous future prospects, latest trends and exclusive networking with the companies from the same industry.

Health & Welfare
The medical fair aims to direct the health care group giving them an opportunity to gauge trends and developments in medical industry. It gives them a chance to meet decision makers from India and abroad, whose and who of medical fraternity as well as renowned doctors & veterinarian surgeons. The fair tries to accomplish welfare of the buyers and sellers belonging to health care groups and pharmaceutical industry at its best.

Welcome to Mumbai
So, IndiaMART.com welcomes all manufacturers, exporters, importers, purchase managers, doctors, et al to be a part of this mega event in Mumbai, the bustling and lively city of India which is enjoying both an excellent economical climate and blooming healthcare services sector. Come and join IndiaMART.com at 'Buyer Seller Meet' where it opens gateway for Medical & Healthcare sector to a better tomorrow.

'Buyer Seller Meet' Schedule:

Date: 2nd - 4th March, 2012
Time: 10:00am - 04:00pm
Venue:  Bombay Exhibition Centre, Mumbai

Fill up your buyer's registration form by clicking on the link below and get a Face-to-Face interaction with suppliers of medical products:
http://trade.indiamart.com/mailer/ts231111/medical-fair-india.html

For more information, please visit:
http://www.biztradeshows.com/medical-fair-india/

Innovate to Sustain and Grow

Globalization has brought many markets together and presently, the competition does not just rest within a single country. Products and services from various enterprises located across the world are competing on a single platform. In times of such competition, the success of any particular company is gauged by the speed at which it can innovate goods and bring them to the forefront.

What is innovation?
Innovation defines the ability of any agency to benefit from the breakthroughs of scientific achievements and convert it into practical solutions for marketing. A combination of efficient flow of technology, ready supply of finance and adequate business skills are the three pillars which can boost an SME. 

Teamwork makes it easy for you to innovate

Many SMEs keep on repeating their processes and often fail to innovate and thus eventually lose to competition. SMEs have a huge potential to innovate and are well aware of their market. They are familiar with their manufactured product and user expectations and can utilize the opportunity to innovate. Lack of funds is also another deterrent for many SMEs.

Engage relevant talent
To improve their status, SMEs can even hire an innovation coach who would share his expertise to prepare the innovation process. They can also hire exclusive R & D professionals for new product developments and dedicate an entire wing for the same. They can outsource the research work at a much cheaper rate.  Many low end SMEs may not be able to innovate as per their requirement. They should improve their efficiencies in HR, finance and customer management systems to support themselves.

It has been proved that firms which invest a good amount of their profits in developing innovation or R & D turn out to be at the top of their list in production. SMEs also need to understand the various SOPs offered by the government or policies which can be utilized by them to fund their R & D projects.

Spread good humour
For bringing innovation one has to understand its benefits and also venture into new collaborations to initiate innovation. An SME has to invest in promising innovators who can boost and contribute with greater ideas in the existing set-up. A work culture suitable for innovation has to be cultivated and results are expected to show with the passage of time. It has to be reflected in various segments within the agency including in its management. It is a group phenomenon and never an individual attempt, thus, the team has to be nurtured to express their views and encouraged to be creative.

Innovation also demands a certain dedication in terms of manpower, resources and finances. SME needs to prepare their employees by sending them to workshops, seminars and conferences where they can pick up handy tips. Senior staff are often found to be antagonistic towards innovative ideas and implementations and they also need to be kept in the loop regarding new processes. Ideas have to be worked upon in a collaborative manner and supportive people are required within an agency to support new initiatives. Fostering innovation is hard, but innovative SMEs are cut out for a larger canvas.

SME Exchange of BSE to see first IPO today

Bombay Stock Exchange

The Bombay Stock Exchange (BSE) will commence its small and medium enterprises (SME) platform with Rs 8.50-crore initial public offer (IPO) of non-banking finance company (NBFC), BCB Finance.

 

The IPO will open for subscription today. It will be the first issue to be traded on the segment during March. The firm will secure Rs 8.85 crore via the issue, which will end on February 27 and the issue price has been set at Rs 25 per share.

BCB Finance is mainly involved in the business of advancing loans and investing/trading in securities. If the IPO attains success, it is expected to pave the way for the listing of other firms on the platform. 

Both the bourses, BSE and NSE have been facing pressure from Centre to unveil a separate trading platform for SMEs.

For more news, click: http://news.indiamart.com/story/sme-exchange-bse-see-first-ipo-today-155761.html

Employee Retention - Invest, Reward, Respect

The success of any budding or existing SME lies in its team of dedicated and productive employees working with it. As a management initiative, it is necessary to retain potential employees and reward them from time-to-time. A study has established that 62 per cent of SMEs face hurdles in recruiting and retaining staff over a period of time.

Invest in your employees
Often, companies invest in a wide amount of infrastructure to train their employees for better production and losing them because of a lack in retention skills can prove to be a big loss. SMEs especially need to prepare their HR processes to save themselves from losing valuable employees. Also, competitors do not hesitate in poaching potential workforce from other companies and may cause damage to the companies by offering their employees better incentives. 

Retain your employees with competitive wages

Competitive Wages
There are a number of ways in which an organization can retain their trusted employees. Paying competitive wages is one of the most important methods to hold existing employees. Also, providing your employees a reasonable amount of flexibility in their jobs can prove to be beneficial. A variety of benefits such as changes in schedule, fixed shifts, leaves for personal matters and family-supporting initiatives can also be crucial. Long-term employees need to be appreciated for their long service. Encouragement to them also proves to be a good example for other employees who realize that the company appreciates their commitments. Simple incentives such as health insurance, benefit packages could support them in making a decision to be with the original employer. It also offers the SMEs an additional advantage over the competition.

Respect your employee
Another key area in employee retention is respecting the employee and offering them space and support. Individualized work desks, promoting healthy relationships, and providing supportive trainings are some of the steps which can be taken by a company. Promoting interpersonal communication is also crucial for supporting existent and new employees. Various communication initiatives such as focus groups, attitude surveys, hotlines, etc. can help them in corresponding about their needs and requirements. A good employer must know what his employee wants. 

Make it transparent with your employee

Retention bonuses are another important step in retaining an employee. SMEs often face a lot of difficult situations such as mergers, acquisitions, financial difficulties, etc. It is vital in those times that companies release retention bonuses to support their employees and retain them. Also, it is better to release the amount over a period of time rather than pay it as a lump sum.

Managing a new hire
In worst cases, one may have to lose out on trusted employees and can benefit from new hires who would be more eager in their performance, would be cheaper to afford and can grow up to be a potential addition to the workforce. The only cons to a new hire would again be the question of reliability and standard requirements for training and nurturing which may take precious time of the employer. 

It is always difficult to find skilled workers and more so, in the times of a tough competitive market and financial meltdown. It always makes sense to retain one’s most effective workers.

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.