With the start of this year 2019, the MSME in India is looking for new ways and practices to grow and expand its operations. With the New Year onboard, the MSME owners are looking for different ways to give their MSME in India a new direction. In this blog, we shall discuss 5 practices that MSMEs can adapt to expand their operations in this year.
What is an MSME in India?
MSMEs in India are the Micro, Small, and Medium Enterprises. The government of India has enacted the MSMED Act (Micro, Small and Medium Enterprises Development Act, 2006) for MSMEs. The definition of MSME in India according to the MSMED Act is:
The micro-enterprises are the enterprises in which the total investment in plant and machinery is less than INR 25 lakhs.
The small enterprises are the enterprises in which the total investment in plant and machinery is more than INR 25 lakhs and less than INR 5 crores.
The medium enterprises are the enterprises in which the total investment in plant and machinery is more than INR 5 crores and less than INR 10 crores.
How an MSME in India Can Expand its Operations in 2019?
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When operating a business, every business owner looks at different growth opportunities and tries his best to expand his business. Expansion of business leads to increased sales and profits. Let’s take a look at 5 practices that you as an MSME owner can adapt this year to expand business:
Setting goals, financial goals in particular, is important for business growth. You must define the goals in a manner that you can easily evaluate if they are achieved or not. The goals can be long-term (profitability, margins, etc.) or short-term.
For example, if you are a retailer and want to acquire the next retail store for further expansion. Then you must know the ways to expand the business without letting your daily work get affected in any way. In addition, you must also have a clear sense of additional costs that you must require for the same purpose.
Based on this financial plan, you can create a budget and stick to it the entire year. You can also avail an unsecured business loan for this purpose from an NBFC.
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The beginning of the year is the right time to assess ongoing debts that may have accumulated in the past year(s). You can start by weighing the existing business loans on you and the number of EMIs left for the same. It is suggested that you must repay the loan with highest loan ticket size.
Notably, many people see MSME loans as a liability. However, the point to consider is that they also act as an instrument for expansion and growth for MSME in India. And if you have a good opportunity at hand but are reluctant to accept it due to lack of finance, you must consider availing an MSME loan in 59 minute. We offer different types of MSME loans in India, you can visit our website to check out our loan products.
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An unorganized compilation of accounts is the most recurrent problem with most of the MSMEs in India. This can lead to financial loses which can only be discovered unexpectedly. So, it is important to keep the books in an organized way as unorganized books can have a long-lasting negative impact.
It is imperative to have a record of financial performance as well as the operational performance of the enterprise. And also the method you are adopting to maintain the accuracy of data. And if you keep and manage the accounts on your own, it is suggested that you hire a professional accountant. This will help you get better results of book-keeping and you can also focus on other tasks while outsourcing this.
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As an MSME owner, you look for different partnerships in this year to expand your business. For instance, if you are into manufacturing a product, you can partner with product distributors, retailers, and customers. In addition, with new partnerships in the same field, the competition increases.
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Extending the customer base is the ideal way of expansion for any MSME in India. It makes the enterprise larger. However, it is important to know the best time to attract a new base of customers. You can improvise your products and services in different ways. And also, promote your products through advertisement, marketing, social media, etc.
A soundly prepared budget while keeping all the above mentioned points in mind will ensure that you are moving in the right direction in 2019. It also provides you with an idea of what your competitors are up to. And when you are armed with a well-planned strategy, you can certainly take your business to new heights.