Theoretical Background
Developing countries like India, Small Medium Enterprises (SME) plays a key role in transition and developing countries. Small Medium Enterprises (SME) constitute a major source of employment and generate significant domestic and export earnings. As such, SME development emerges as a key tool in poverty reduction efforts. Considering that they lack resources compared to large enterprises.
Definition:
Small Medium Enterprises (SME)
Manufacturing Enterprises The enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule to the industries (Development and regulation) Act, 1951) or employing plant and machinery in the process of value addition to the final product having a distinct name or character or role. The Manufacturing Enterprise is defined in terms of investment in Plant & Machinery.
Service Enterprises: The enterprises engaged in offering or rendering of services and are limited in terms of investment in equipment.
Manufacturing Sector
Enterprises Investment in plant & machinery
Micro Enterprises Does not exceed twenty five lakh rupees
Small Enterprises More than twenty five hundred thousand rupees but does not exceed five crore rupees
Medium Enterprises More than five crore rupees but does not exceed ten crore rupees
Service Sector
Enterprises Investment in equipments
Micro Enterprises Does not exceed ten lakh rupees:
Small Enterprises More than ten lakh rupees but does not exceed two crore rupees
Medium Enterprises More than two crore rupees but does not exceed five core rupees
Problem faced by branding of SME Products and Services.
Company brand plays an important role in identifying our products and services in the marketplace, it’s also differentiate your products with other products and services. But the brand is normally associated with big business origination but it is also important for SME
It would be very difficult to establish SME brand’s and services in domestic as well as International market. Advising expenses are a bit expensive it’s not being affordable to Small Medium Enterprises {SME} due to lack of funds.
Branding is a subject of marketing and not advertising as wrongly believed. Theories of modern day marketing look into market segmentation, targeting, positioning and then employs techniques in developing the USP (Unique Selling Proposition) which then further extended to mass and specific audience with the science of branding.
Social Networks is an excellent platform to inform, educate and engage with people, it also serves as an entrepreneur’s online storefront. If it’s not managed wisely, mistakes can quickly go viral and become a small business’s nightmare. Understanding your audience, posting strategically and practicing online etiquette can go a long way toward growing your business. An SME can market their products and services through Information technology are as below
• Networking Sites like Facebook, Watz up etc. Free advise your products & services
• Established your Company or Origination community page’s, share your products and services.
• Develop on your own web page-free web pages on the net at min amount
• Blog- Information about your products, specification, price etc.
• Business networking sites like Linked in, an SME can add or developed a discussion group or forms.
• B2B or B2C sites are one of the best options to develop a sound business opportunity
The parish faced a funding problem:
Finance Minister has proposed to provide Rs. 5,000 Crore to SIDBI for refinancing incremental lending by banks to SMEs out of the shortfall of banks on priority sector lending targets. In view of the problems being faced by handloom weavers, inability to repay debts to handloom weaver cooperative societies which have become financially unviable, FM has proposed to provide Rs. 3,000 Crore to NABARD. The initiative is expected to benefit 15,000 cooperative societies and nearly 3 Lakh handloom weavers. These efforts could not bring a lot cheer to the sector as many concerns still remain.
Though additional Rs. 1000 Crore to SIDBI may help address priority sector lending concerns, but it does not stand anywhere near sufficient. This is because borrowing costs still remain high for the sector. Farming did see some relief in terms of lower interest rates on loans. SME is the foremost employment generating sector and owns a significant contribution to Indian GDP. Currently, unavailability of funds plagues the growth of many SMEs and at the same time loans rates faced by them are as high as 16% and above, which affects investment decisions.
• SME Collateral free loan
• SME easy loan against property
• SME open term loan
• SME Credit Card
• SME warehousing Receipts Financing
Small and Medium Enterprises (SMEs) are often confronted with problems that is uncommon for larger companies and multi-national corporations. The problems inherent in these approaches include the following
The lack of financial resources has far-reaching effects
As an SME/SMI, a financial resource is often restricted. This often forces companies to select a solution, which appear to be cheap initially. However, the hidden costs will begin to emerge during implementation. This sometimes causes the project to be abandoned or sometime sent the company into further financial crisis.
Lack of Experience of Using Consultants
A good consultant often saves time and effort, and help to prevent pitfalls during the IT projects. However, most SMEs lack of experience in working with consultants. The lack of knowledge in the field of IT makes them difficult in identifying a good consultant for the projects. They often feel that the consultant cost is too high and they can handle it with their own stuff. If the caller has no staff that are experienced and versed in the IT project, avoiding external help often costs more to the company eventually.
MEASURES TAKEN BY GOVERNMENT OF INDIA (MSME)
• National Manufacturing Competitiveness Programme (NMCP) Schemes Under XI Plan
• Micro & Small Enterprises Cluster Development Programme (MSE-CDP)
• Credit Linked Capital Subsidy Scheme for Technology Upgradation
• Credit Guarantee Scheme
• ISO 9000/ISO 14001 Certification Reimbursement Scheme
• Scheme of Micro Finance Programme
• Scheme of National Award
PROGRAMMES & SCHEMES OF THE MINISTRY OF MSME IMPLEMENTED DIRECTLY BY MINISTRY
• Scheme of Surveys, Studies and Policy Research
• Guidelines of Scheme for Assistance to Training Institutions ( English/ Hindi)
• Scheme of Fund for Regeneration of Traditional Industries (SFURTI)
• Rajiv Gandhi Udyami Mitra Yojana (RGUMY)
Implemented through NSIC
• Marketing Assistance Scheme
• Performance and Credit Rating Scheme
Implemented through KVIC
• Guidelines of the Market Development Assistance (MDA) on Production Scheme
• Khadi Karigar Janashree Bima Yojana for Khadi Artisans
• Interest Subsidy Eligibility Certification (ISEC)
• Scheme for Enhancing Productivity and Competitiveness of Khadi Industry and Artisans
Workshed Scheme for Khadi Artisans
• Implemented through Coir Board
• Rejuvenation, Modernization and Technology Upgradation of the Coir Industry
Support for Participation in Exhibitions
MSME MDA – The scheme offers funding up to 75% in respect of to and fro air fare for participation by MSME Entrepreneurs in overseas fairs/trade delegations. The scheme also provides for funding for producing packaging material (up to 25% of costs) Sector specific studies (upto Rs. 2 Lakhs) and for contesting anti-dumping cases (50% upto Rs. 1 Lakh) – for individual MSMEs & Associations.
» Participation in the International Exhibitions/ Fairs – For registered Small & Micro manufacturing enterprises with DI/DIC.
» Financial Assistance for using Global Standards (GS1) in Barcoding – Recognized the importance of Barcoding and avail financial assistance through the Office of DC (MSME).
» Purchase and Price Preference Policy – This is administered through the Single Point Registration Scheme of NSIC. Under this, 358 items are reserved for exclusive purchase from MSME by Central Government. Other facilities include tender documents free of cost, exemption from earnest money and security deposit and 15% price preference in Central Government purchases – for individual MSMEs
References
1. http://dcmsme.gov.in/
2. http://msme.gov.in/msme_schemes.htm
AAShirgurkar&Associates 