SMEs should be in adaptable mode if they want to grow: Expert

Nagpur, Sep 12 (KNN) Under ‘Make in India’ initiative, Small and Medium Enterprises (SMEs) sector which is currently growing at a rate of 12-13%, will have an important presence in Defence, Manufacturing, Technology, Transportation and Health care sectors in the days to come, said Jagdish Ramaswamy, President, Business Excellence, Aditya Birla Group while delivering a talk on ‘ Tips for SME’s to scale up to the next level’.

The talk was organized by Entrepreneur Forum of Vidharbha Industries Association (VIA).

Elaborating on the subject he said, if companies have survived and grown big, it can largely be attributed to their ability to meet the customers’ demand before they ask for it.

He said that SMEs should be in adaptable mode if they want to grow, for which they must cultivate the ability to change. There could be a plethora of ideas, but the main issue is execution, which largely differs from company to company.

“SMEs need to innovate from time to time and should imbibe the spirit of change management. The Leadership need not rest with entrepreneur himself, it can be with anybody – anyone who can safely steer the ship to its destination by overcoming the challenges. So SME’S must learn to invest wisely in manpower,” he explained.

According to Ramaswamy, SMEs should pay utmost importance to the selection, training and retention of manpower.

A company need not be a conglomeration of brilliant people; even average people can make a company grow provided the right person is put to the right job.

“The company should know to extract the best out of its people so that you have people who can offer excellence and unlimited ability to improve the quality of what you have to offer to the customers. Special attention should be paid to transparency in all aspect of business if SMEs wish to really grow. Business should be made consumer centric and the motto should be ‘Quality First’,” Ramaswamy said.

He also said that many SMEs fail to scale up due to the inconsistencies in the quality of their products and services. Two out of five SMEs shut shop because they are not able to sustain quality wise.

Ramaswamy laid special emphasis on digital and technological adaptability of SMEs and Supply chain management. The small entrepreneurs can invest in technology by making use of opex model of IT. In the days to come SMEs will have to brace themselves for the tracking system, where the customer would keep abreast with each stage of production. SME’S can invest in long term customer relationship and take their ideas to the next level.

He advised that the sector should soon prepare themselves for proximity to the customers and take a call on whether to have a single centralized set up or a multi-point unit to have a close contact with the customer. The main challenges they face today is the liquidity crunch, business continuity and need for transparency which makes it extremely hard to hide the mistakes.

Ramasway advised that if the SMEs are serious about scaling up, they should focus on the areas of resource management especially people; have a succession planning; judiciously use working capital; and reduce cash transaction. (KNN Bureau)