Small and medium businesses (SMBs) are the engines of growth that drive the global economy. They provide employment to thousands of people, bring economic independence to local communities and help achieve income parity in societies. Despite their importance in the global economy, small and medium businesses all over the world face innumerable hurdles like government apathy, unfriendly tax policies, complex regulatory guidelines and non-availability of funds.
Advanced economies like the USA understand how critical SMBs are to economic growth and adopt a proactive approach to supporting and encouraging SMBs. There are several federal, state and local programs offering free grants and loans to small and growing ventures. Information and details regarding the same are made available to entrepreneurs through publicity initiatives and other outreach activities.
In India too, with Make in India and Digital India programs, the government offers several schemes to help startups and entrepreneurs access funds and subsidies. There are also schemes that allow entrepreneurs to utilize technical expertise that may otherwise be unavailable to them, get raw materials at subsidized rates, tap into infrastructural support and avail networking opportunities. But there is still a long way to go and here we take a look at how it is possible to make doing business easier for SMBs.
Empowering Entrepreneurs with Knowledge
Small business owners have to take important decisions every day regarding how they want their venture to grow, acquire customers, stay profitable, reduce costs, bring in innovations, maintain cash flow and drive marketing. Smart and effective decisions can be made only if they are fed by accurate data. This is one of the areas where small businesses in unorganized sectors suffer.
The Office of Advocacy is an independent voice for small businesses in the US Small Business Administration (SBA) that sensitizes the government, courts, and policymakers to the unique challenges that SMBs face. They routinely publish research reports, policy analyses, FAQs, bulletins, local SMB performance reports, and economic outlook surveys. Reliable and relevant data help small business owners make informed decisions and stay away from making tactical blunders. It is possible to create the same knowledge database for Indian entrepreneurs as well to ensure that they are empowered to make informed decisions.
SIDO Online is a knowledge portal implemented by the Ministry of Small Scale Industries to act as a one-stop source of information about the small-scale industry in India, offer insights about its growth potential, mentor new entrepreneurs, advise on dealing with challenges and educate about financing options. Latest statistics and recent research papers are a very critical knowledge base for entrepreneurs and the government will do well funding more such studies. More industry-focused reports and regional data will help small business owners develop a holistic understanding of their business and operational environment.
Help Harness Cutting Edge Technology
Small and medium enterprises can achieve their business goals by investing in technology that will help automate processes, streamline business functions, capture and use big data, and enable effective and quick decision making. Big data includes the vast amounts of data that streams into your system from various applications. With IoT, a large number of devices and systems are able to speak to each other, thus generating virtually unlimited amounts of data. The website, business apps, POS devices, social media platforms, review sites, various databases, and all interconnected devices generate mindboggling amounts of data.
To compete in today’s crowded marketplace, small and medium enterprises cannot afford to lag behind in utilizing big data. You do not need a massive budget, fancy software or expensive consultants to capture and transform data into useful information, but can rely on something that you already have. Your website can serve as a powerful analytics tool. Google Analytics is free and helps you track user traffic and behavior, analyze social media activity, monitor customer journeys, study exit rates of website pages and improve conversions. There are several other tools as well like Kissmetrics and InsightSquared that mine actionable information from big data.
In India, specialized schemes are launched by the government to support and promote technology adoption among small businesses. Electronic Development Fund Policy (EDFP) and NewGen Innovation and Entrepreneurship Development Center are a couple of schemes by the GoI that provide financial assistance to SMBs to fund technological advancements.
How do You Gather Data?
Sources of data include what you can directly capture through online tools and software programs, as well as that which you can access through third parties.
In the US, there are several established and decades-old companies like Equifax, Corelogic and Acxiom that, often controversially, serve as consumer data brokers, selling companies valuable insights into their customer base. Open Data 500 is free public data that can be used to launch and grow businesses. Data brokerage is still in nascent stage in India, but points to the increasingly higher value being attached to big data, data mining and the actionable insights that can be gained from them.
Almost all data brokers operate in the grey zone with the activities not entirely classified as illegal in India. The major players in the Indian market include MNCs like Experian, Equifax, Epsilon and TransUnion CIBIL Ltd. that provide sophisticated data sets and credit information to customers. It is also possible for end users to check their credit history using the services of these companies. If small and medium enterprises are able to use this information to flush out clear profiles of their target customer base, then marketing and outreach activities can be made more effective. But it is extremely important to note that there should not be any misuse of data and that customer privacy has to be of utmost importance.
Small and medium businesses do well when the entrepreneurs invest their time and effort into networking, adopting latest technology and staying nimble. This will help businesses adapt to customers’ changing preferences and anticipate market demand. Globally, entrepreneurs realize that they need to measure up to the customer experience provided by big companies like Amazon and Apple, and must delight customers in the same manner.