5 Big Challenges Faced by MSMEs to Grow!

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Micro, small & Medium Enterprises (MSMEs) are the plinth of the Indian economy propelling growth, creating employment, diversifying industrial activity and promoting equitable regional development. With its agility and dynamism, the sector has shown admirable innovativeness and adaptability and has maintained a constant growth rate higher than the overall industrial growth. According to the latest MSME Annual Report (2015-16) released by the Ministry of MSMEs, these enterprises contribute around 37.54% of the national GDP with manufacturing enterprises accounting for around 7.04% while service enterprises making up the remaining 30.50%. The annual growth rate of the MSME sector was 18.74% during 2015-16 which bears testimony to their impressive performance.

 

Though the above figures do highlight the remarkable progress and contribution of MSMEs, there are still few challenges which inhibit and restrict their growth. As per our research and interaction with MSMEs pan across India, we came across 5 most common challenges which act as deterrent for the expansion of their business.

Difficulty in Finding New Markets and Capturing Larger Market Share of Existing Markets

This is the classic case where you know there is a huge market for your products or services but you don’t know where it is and how to get there. Any market is made up of buyers and suppliers of a particular product or services. Markets can be spread across geographies & demographics and you might be limited to a particular geographical market. So limited reach to the large or full customer base of your market means you are not able to generate maximum business out of that particular market. Also not able to expand your customer base to other markets in the same product segment means you are not able to reach to the complete user base of that particular market. So you have a decent product for a particular industry but you have limited access to that particular market without any idea or access to the rest of the market. This limits the market reach of your company thus affecting sales and revenues.  

Problems in Accessing InternationalMarkets 

Export markets are full of all sorts of possibilities. This market is quite big, no doubt about that. But there are certain challenges like how to access these markets, how to find buyers in respective markets and how to reach out to buyers in a particular market. It takes investments, time and lot of marketing efforts to reach out to these buyers which most of the MSMEs are not able to do. So in spite of having products or services of international standards, your reach to the global markets are rather limited, thus limiting your export growth and subsequently your business growth.

Not Getting Enough Business Opportunities Related to Their Industry

 Many MSMEs also said that they know there are many opportunities available in their sector but they rarely gets any information on such business opportunities or they get information only after that business opportunity has lapsed. Like Tender information are very crucial business information which are time bound. Looking through various sources like the websites, magazines and the newspapers is very tedious & cumbersome task which needs lots of time and resources to manage. Not having access to such information that too in time can be a lost opportunity to your business.  

Not Able to Connect With Businesses Which Can be Future Customers  

You will also agree with this. You attend events, exhibitions, Trade shows, use LinkedIn to grow your network thus growing the list of the prospects who might become your clients in the future. Expensive, Time Taking, lots of travelling – you might think these when you think about networking in this way.Connecting with right people is a great way to expand your qualified lead list who can ultimately become your customers in the future.

So How to address these Challenges?

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