SME PROBLEM SOLUTIONS
SMEs face a number of problems on a day-to-day basis. The internal and external issues that keep arising hinder the working of the organization which ultimately has an adverse effect on the financial aspect of the business. In this blog post, we will delve into the problems faced by SMEs.
Delayed payments
Most often SMEs face a financial crunch and the major reason for this is the delayed payments. The receivables if arrive in the company’s bank accounts on time, the financial stress will reduce considerably. To deal with this issue the Indian government had come up with the Samadhaan scheme. As per this scheme, the buyer needs to pack the vendor within 45 days or else they will have to pay a penalty. Have right strategy and follow up for the receivables. Losing the follow up can create big problems.
Lack of funds
Though the Indian government has come up with a number of schemes to help finance small scale industries yet most often SMEs are deprived of finance. Because of the economic slowdown banks and NBFCs have become averse of giving loans to SMEs. Apart from loans, understand your working capital cycle, right from buying raw materials to order processing to sales and finally receiving the money. Check the total cycle and find out where you can reduce the number of days. More fast the process, more quick the payment
Lack of planning
There needs to be a clear and focused plan of action in place. The small organizations fail to realize how having a clear plan can help them in the long run. Lack of a plan can ultimately lead to financial losses. As also, it is important that the company upgrades and improvises its plan from time to time to suit the technological and economical updates.
Failure in leadership
Most often the owner of a small organization goes out of the way to perform the different roles and that leads to failure in leadership. It is important that the leader stays focused unless it is absolutely necessary to divert attention to some other aspect of the business. Hire a right team for the right work. Owner should not pass accounting entries where is main role is to frame strategy for his business.
Marketing
Marketing the products of SMEs is the biggest issue. Most often small-scale industries either have no knowledge about how to market their products or do not have enough resources for marketing. It is advisable to understand the unique selling point of your products and chalk out the marketing program for the organization in the initial stages of planning.
Lack of execution
Even though everything is planned yet execution becomes major concern for SMEs. Many strategies fail because of lack of execution and timely improvisation. There is no tool to help measure the performance of the organization and even if there is, the employees and the owners are usually not aware of it. Sit with the team and partners. Have board meetings. Check where is the loophole. Ask suggestions. Have proper CRM Software to manage the sales pipeline.
Client retention
Retaining clients is important for the growth of any business. The talent acquired to get clients on board needs to be trained properly. Right from their body language to their marketing skills everything needs to be taken into consideration only then it will help in client retention. Also, the organization needs to have a brilliant after-sales service to keep the clients happy.
Employee retention
Often it is found that employees aren’t satisfied with the jobs. They do not find growth in SMEs and SMEs also neglect the aspect of HRD. We have spoken at length about this aspect in one of our blogs and given solutions as to how to retain employees.
These are some of the burning problems of SMEs. However, with timely schemes and help by the government and by employing a good system, SMEs are able to tackle these issues.
If you would like to know more about SMEs or need help with these problems please feel free to get in touch with caswetamakwana@gmail.com
