Tech Shows The Way To SMEs’ Revival

The pandemic has dramatically changed the world by reshaping and remodeling our livelihoods. The economy has faced multiple crises, like health, and financial. With an average rate of contraction recorded at 7.3 per cent for the entire financial year 2020-21, the country recorded its largest drop in GDP in history. The hardest hit were the Indian households, workers, and small businesses. Around 10 million people lost their jobs during the second wave of Covid, leaving many people with no income.

However, as every cloud has a silver lining, some people proved how moments of adversity in life can be the greatest opportunities. Chef Amit Wadhawan from Gurgaon lost his job in May 2020 and that’s when he decided to follow his passion. He soon launched his range of jams (from Kiwi to apple jam), malted chocolate, gluten-free options, and more, which  soon became a hit.

Pooja Goel, an MBA in marketing, lost her job offer with a digital business transformation company due to the pandemic, which came through an end-to-end campus recruitment campaign. Initially bewildered, she then came up with the idea of launching a platform (Pink Collar Professionals) that supports small businesses (edtech, clothing, handmade ornaments) led by women. The company helps promote its business through different digital marketing strategies and ideas. Goel, in association with the Smile Foundation, also imparts digital skills training to rural women.

So, what was the driving force behind all these small business success stories? While the will to get going and creating an income stream is the primary motive, technology, here, plays a significant role in the economic recovery of people who lost their jobs and incomes at the time of the pandemic. Thus, it has shown a ray of hope for the economic revival of the nation as a whole.

Healing Covid Wounds

For budding entrepreneurs, digital technology like social media platforms (Facebook or WhatsApp) or websites served as their promotional or marketing strategy. Although not all companies can set up websites or purchase expensive software packages, there is still hope for them by utilising free online tools that help them grow their business and make it easier for customers to find them. Digital adoption has played a major role in the business revival post-Covid by bringing in more opportunities for small and medium enterprises (SMEs).

For many business owners like Sunita Anil Agarwal, going digital was the turning point for their businesses. Agarwal’s  was one among the many businesses that were hit by the pandemic. As she dealt with low-value, high-volume transactions, Khatabook, (a ledger account book app, based on the traditional “under bahi khata” concept), helped her control the losses by and large. The app now helps her to manage and keep records for the sales numbers or send payment reminders to customers, eliminating the need for the traditional bahi khata for her.

A study conducted by Google and KPMG says that digital SMEs have recorded almost twice the forecasted revenue growth as opposed to the ones operating offline.

Some of the small businesses that were forced to adopt technology and operate online are ration stores and restaurants. While they started accepting payments through UPI or digital wallets, the restaurants started delivering food through apps like Swiggy and Zomato. Among other online services that recorded a rise in business were home service businesses like the Urban Company, HomeTriangle and Housejoy, besides online learning.

However, social media is just one part of the digitalisation of SMEs or MSMEs (micro, small and medium enterprises). Let’s look at some of the other major applications of technology that can help small businesses grow.

Mobile Technology

From individuals to small or large enterprises, mobile technology has made its presence felt all over. However, the most benefitted are the small businesses due to their power to generate omnipresent customers. By the same token, if the business has a website and it’s responsive, the chances of ranking high in the search results are higher. It’s a bonus if the business operates through an app.

The new kid on the block is the cashless and contactless digital payment means like e-RUPI. It works like a prepaid gift voucher that can be sent to mobile phones through SMS or QR code to a beneficiary and can be redeemed at the authorised centers.

Ravish Naresh, CEO and co-founder, Khatabook, says, “Digitisation can be a huge contributor in creating resilient MSME businesses. With the prolonged effect of the pandemic, we need to think about efficient business processes for MSMEs. IT infrastructure helped corporates to shift to a work from home model. Similarly, digital infrastructure should help MSMEs to change their business operations and be sustainable.” This is where digital apps like Khatabook can help users understand real-time transaction data and prepare businesses by assisting them to plan for sales or recovery-focused activities to be more resilient towards pandemic-induced effects.

Data Security

Online security is one of the biggest dangers of the internet these days and a threat to business data. With the recent rise in security breaches in India post-Covid, it has been found that SMEs are the most vulnerable to security attacks (according to Seconize, almost 50 per cent of the cyberattacks target SMEs).

The latest cybersecurity technologies include:

1. Artificial Intelligence and Deep Learning
2. Behavioural Analytics
3. Embedded Hardware Authentication
4. Blockchain Cybersecurity
5. Zero-Trust Model

Customer Relationship Management

While keeping a record of business data is crucial, maintaining customer relationships is also among the top marketing strategies for a successful business. This aspect is achieved using the customer relationship management (CRM) tools that help businesses collect, organise and manage customer details efficiently. Well, along with enhanced relationships, it also empowers small businesses to add potential customers and win back the lost ones.

Data Analytics

You are living in a bubble of delusion, if you thought that your small business could grow simply through digital marketing efforts (a website, Facebook business page, YouTube channel, or social media presence). That sounds motivating only till you are reading a nicely crafted digital marketing article.

For your small business to make headway, you need to know the potential market size, the target area, the age group of the audience, their likes and dislikes. So, the data analytics helps you understand the demographics, assess the expenses incurred on gaining prospects and converting them to customers, analysing the current trends and patterns, keeping an eye on the competitors, and offering something innovative. Therefore, data will talk to you, only if you are willing to listen.

Cloud Computing

Cloud computing is one of the most popular technologies adopted by small businesses these days. Low-cost solutions, increased flexibility (for example, Shopify or Freshbooks), reduced risks, or lesser load on IT resources are some of the reasons why small businesses have a strong reason to depend on the cloud culture.

While cloud computing involves three major technologies—Software-as-a-Service (SaaS), Infrastructure-as-a-Service (IaaS), and Platform-as-a-Service—SaaS emerges as the most sought-after technology for SMEs.

The existing market share in India constitutes 2.6 per cent of the total SaaS market across the globe and is projected to touch 8.9 per cent in the near future.

HR Software

Managing manpower is a crucial aspect for any business, be it big or small. An HR software helps businesses manage administrative operations and to cope up with  demands like managing employee information (attendance, leaves, appraisals, salary, training, and attrition) with finesse.

Artificial Intelligence

Artificial Intelligence or AI is the driving force behind many small enterprises. From marketing automation, chatbots for customer engagement, integration with CRM, strengthening cybersecurity, tracking business competitors, or providing training and support to the salespeople, the primary aim of the AI technology is to improve business performance, reduce expenses, and save time.

At the same time, some technologies can prove to be innovative for businesses shortly. For instance, establishments like Ikea are already using the Augmented Reality (AR) technology to help their customers test their furniture in real-time.

Growth Driver

Ronal Regan once said, “Entrepreneurs and their small enterprises are responsible for almost all the economic growth in the United States.” The statement stands true even today, and also for India, to a large extent. The SME sector in India contributes to more than 40 per cent of the total GDP and holds the crown for providing significant amount of jobs to the Indian citizens.

However, the global crisis due to the pandemic had a major impact on MSMEs and small businesses worldwide. This led to a pull in the cash flow and upheaval in the supply chain. This calls for an urgent revival of the businesses from the cash flow crunch and lack of labour, and a technology-transformation approach emerges as the only solution for SMEs and MSMEs.

This was the time when the lending apps played a major role in funding budding entrepreneurs and reviving existing MSMEs. Commenting on the current situation and the contribution of the lending apps, Ranvir Singh, member of FACE and co-founder and managing director Kissht, says, “In order to support budding entrepreneurs, digital lending platform Kissht has taken several steps. First, the introduction of a credit line product, which allows small entrepreneurs to choose the repayment schedule, as per their working capital cycle, as against fixed schedule payment. This helps them tide over erratic cash flow situations better. Second, by leveraging our technology platform, we quickly activated a shorter-term loan of 90 days as against the usual longer tenure of one year. Third, we also offered a delayed repayment option, which allowed the customer to request for extension of the repayment date by 30 to 90 days, without having to pay any late fee penalty. We also offered loan moratoriums. During the pandemic, over 40 per cent of our customers availed the option.”

While a major chunk of the transformation credit for small businesses goes to digital technologies, other technologies like cloud computing, AI, CRM, or data analytics are equally important to manage areas like logistics, supply chain, record keeping, inventory management, or marketing.

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Can Govt Policies And Schemes Support SMEs?

Despite the pandemic, some of the small business segments that have been thriving off-late are the IT, wellness, technology, or service delivery industries. At the same time, the government decided to expedite the process for budding entrepreneurs who are willing to launch a company that will extend its support to the population through increased job prospects.

Some of the schemes introduced by the government in this regard are:

• Atal Incubation Centre (AIC) – Supported by the NITI Ayog, entrepreneurs can avail of up to `10 crore over five years to cover their operating costs of capital.
• MSME Business Loans in 59 Minutes – Launched in 2018, this scheme offers financial support to MSMEs and is disbursed with 59 minutes.
• Credit Link Capital Subsidy Scheme for Technology Upgradation – This scheme supports technological upgrades and aims to enhance business productivity.
• MUDRA Loans – Targeted for micro-businesses, this scheme lends them finance for the business units.
• National Small Industries Corporation Subsidy – This scheme offers financial assistance to small businesses for raw materials and marketing.
• Credit Guarantee Fund Scheme for Micro and Small Enterprises – This scheme targets all MSMEs (new and existing) and provides working capital loans of up to nearly Rs 10 lakh.

At the same time, the government already has some policies for budding entrepreneurs in place such as incentives and subsidies for domestic industries, routine quality checks, commercial technology transfer, developmental aids for small-scale industries, prompt information delivery, fundamental infrastructure support, offering financial assistance, focusing on regional growth and development, developing and establishing laws, and ensuring law and order.

Venturing into start-ups or a small business setup requires a lot of preparation. Whether the business is profitable or not will depend on what all strategies and techniques are implanted and how, but prima facie, there must be a potentially profitable industry in mind. Some of the small business ideas that can help budding entrepreneurs rake in some good money are auto repair, food trucks, car wash, electronics gadget repair, and IT support.

The Covid phase is one that taught a lesson to the world that how a catastrophe can change the course of things in a moment. While most businesses suffered moments of despair and uncertainty, many survived by adopting and implementing technology in their business processes. Even the most reluctant found a solution for survival by adopting digital technology and that may just prove one of the major factors of the economic recovery of the country. As Jeff Platt would say, “Spend the time upfront to invest in systems and processes to make long-term growth sustainable.” Embracing the latest business technologies may just prove to be the major catalyst for business growth and the economic revival of the nation as a whole.

The writer is a tech journalist