“Upgrading skills and leveraging technological tools are highly required for MSMEs to take the business to the next level.”
This article covers the challenges faced by the MSMEs and ultimate business practices for MSMEs to retain customers and scale the business.
Strategic business practices play a vital role in the company’s development and growth. Especially in the COVID crisis, adapting to technological tools increases business profits by reducing the current socio-economic challenges. ILO reports stated almost 400 million people are left jobless in the COVID crisis, while numerous small businesses were shuttered. Moreover, the industries with less skillful workers and low-salaried employees were severely affected.
Technology adoption in business practices is the foremost factor to consider. With the rapid increase in digitalization and online consumers, it’s vital to bring small businesses online. If the companies aren’t online, that business doesn’t exist at all.
As you read the article, you’ll discover the challenges faced by the MSMEs and ultimate business practices for MSMEs to retain customers and scale the business. So, without any further ado, let’s dive in.
Challenges of the MSMEs in the Pandemic
The COVID crisis drastically crushed the travel, food, and accommodation sectors. According to the latest reports of the IMF (International Monetary Fund), a few sectors will suffer even harder. Usually, the businesses undergo four sets of processes- Shutdown, disturbances in the supply chain, demand depression, and recovery. To survive in the market, the MSMEs have to face many troubles, right from the shutdown process to the recovery process.
Here are a few challenges of the MSMEs that you should notice earlier.
1. Liquidity Collapsing
With the rapid businesses and entrepreneurs falling in commodity sectors, the buyers are slowing down the payments even after receiving the orders. As MSMEs have poor liquidity, they run out of the market soon. Primarily, it’s a massive shock for businesses who trade internationally as they spend on various fundings in US dollars.
2. Managing & Accessing Inputs
Usually, MSMEs ship products or inputs from foreign countries. With the safety and security features, shipping orders from abroad has become challenging. For instance, if you’re running a garment company in India and want to input fabrics from China or other neighboring countries, it’s challenging to ship inputs due to the pandemic effect. This results in the collapse of input access.
3. Work Environment Management
In lockdown times, running manufacturing units of MSMEs is relatively riskier and almost impossible. As the manufacturing units and work environment is not social distancing, it leads to severe complications. Due to the remobilization of laborers and small employees, thousands of workers have been wiped out.
4. Supply-Chain Disturbances
One of the significant challenges of the MSMEs is the rapid changing of policies. In general, MSMEs work with few tens of employees or even alone. So, tracking the continuous change in policies is tricky to manage. This further affects the supply-chains even.
5. Lack of Support in Emergency
Most of the MSMEs rarely access government support as they mostly trade informally. Due to the less governmental approach, these companies are unnoticed. Hence, it’s hard for the governments to find out the companies or enterprises with emergency support.
These are the few challenges of the MSMEs. One has to understand the emerging challenges of the sector quickly. After accessing the challenges, it’s easier to implement the business practices for MSMEs. So, take time and understand the significant complications in the business.
Best Business Practices for MSMEs
Now, let’s discuss a few business practices for MSMEs.
Technological Tools Assistance
Initially, at the end of 2019, Coronavirus is only concerned with later. Yet, later, it spread across the country’s economy and severely affected the poorer to wealthiest countries in the world. To cope with the crisis and retrieve the economy, leveraging technological tools has become one of the surest ways to recover the economy.
Especially, focusing on the digital networks could give a massive relief to the MSMEs. Moreover, they are budget-friendly and effective in reaching multiple people across the world. Whether you’re a local trader or an international trader, strategic usage of technology garners lump sum profits.
Also, based on the current scenario, several industries have been evolving, such as home-delivery-based organic food productions, masks, and healthcare. Though the pandemic has killed many businesses, it gave a chance to build new enterprises with innovative approaches. The Founder & CEO of Meesho stated, “Small businesses shouldn’t be defensive. Rather, they should be aggressive to compete with fortune industries.” Likewise, Amit Kumar commented that neglecting the business practices’ technology means you’re moving away from adaptability and robust business establishment.
Boost the Business Links & Collaborations
In this social-distancing and lockdown scenario, rebuilding connections plays a vital role in welcoming new opportunities. Here are a few best pointers to consider.
- MSMEs opt for definite plans and strive to achieve them accordingly. However, it’s essential to change the methods according to the present situations with the pandemic shock. Try to understand your customer challenges in this pandemic era. Remodel the plans and business practices that solve the customer solutions eliminating their fears. Set reliable short-term and long-term goals.
- Maintain an organized financial record. Tracking financial losses in the pandemic helps you understand a set of factors in the business practices for MSMEs based on your sector. So, take time to track financial records to scale the business.
- MSMEs start with single-digit employees and eventually expand overseas. So, if you’re also planning to build such a robust business, look for a perfect partnership. Collaborate with companies or other small companies that help scaling businesses. For instance, if you’re manufacturing a product, collaborate with distributors and retailers.
- Finally, utilize the social media handles to engage with your customers. Also, take advantage of digital marketing, promotions, and other marketing techniques to reach your ideal prospects directly.
Collect Real-Time Data and Analytics
In rapid digitalization, it’s hard to gain profits by sticking to a single strategy. So, data plays a vital role in strategizing the business practices for MSMEs. Collect the data from various tools and track the ideal business prospects behavior, latest emerging trends in your business sector, etc., conduct surveys, analyze the data, and plan your business practices for MSMEs accordingly.
The business practices for MSMEs, as mentioned above, help in scaling the company to the next level. As discussed earlier, a few essential business practices for MSMEs include taking advantage of the digital medium, online marketing, technological tools, new partnerships, etc. For any business from micro-businesses to fortune companies, understanding business challenges also plays a crucial role. So, understand business challenges and strategies business practices for MSMEs accordingly.