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Opportunity for Small fish in and ocean of Sharks

The Author is an Alumnus of the National Defence Academy, with a corporate career across Tata Tea, Madhu Jayanti International, Apeejay and Twinings. He is today General Manager Operations in one of the largest FMCG Company in India. Writing, Delivering Lectures and conducting training programs is a vocation he indulges in on a voluntary basis. He offers his services to support entrepreneurial spirit in society.

It is conventional wisdom that the bigger the better. in this case profit. Like in the oceans, the small fish of This thought is deeply etched in the human psyche the Business word the MSMEs can and do adopt and today seems to have percolated into the business various strategies to diminish the advantage enjoyed world. Whenever we think of business the mind space by the sharks. The strategies adopted by the small is dominated by fishes and the Tata, Reliance, advantages of Knowing you strengths is the first step to using them to your Bajaj, Infosys, these can advantage. This is a ready reckoner to use and maximize your Wipro, Godrej directly be advantage: etc. While these corresponded 1. Quick Response Identify your target market and customers and Start big players are to the MSMEs listening and talking to them. Formalize a process for feedback and important pillars in the business suggestions. Whenever you come across something that adds more value in the Indian world. to your products/services and can be implemented easily to, make it economy, the Examples of happen ASAP! 2. Be flexible to market needs, changes and trends Anticipate the needs of foundation is Speed, Agility, your target market, and establish yourself as a leader or innovator. provided by the Flexibility, Sometimes watching what big business can do seems intimidating, but they unsung heroes dexterity and are usually focused on large volume products/services. Your business can the Small and collaboration focus on smaller markets for big success. Big business are usually slow in Medium abound following trends. When you spot a trend, try it. Enterprises. amongst the 3. Give personal attention Develop one-on-one relationships with your SMEs have an large shoals in customers that big business cant build. Big businesses crea te an illusion by important role the ocean. This offering special incentives to make their customers feel more important. and are a growth is an attempt What they offer to Mr X is normally available to Mr Y as well. As a small engine of Indian to articulate business person you know your customers by name, what their favorite products / services are and what their needs are. economy. how these 4. Specialize Your small business can target unique products/services for MSMEs produce translate into niche markets that big business cant afford to pinpoint. Small runs, Manual 40% of the total the business jobs etc are areas that big businesses avoid leaving the entire field to you. industrial output world. 5. Creativity As a small business owner, you need to think outside the box and provide 70% to attract customers. Use your employs constructively. Listen to them and of the The most encourage them to be creative. employment conspicuous 6. Manage your costs You need to stay on top of your finances to come out opportunities. strategy used ahead! Small businesses should require fewer funds to invest, market and SMEs are the by the small innovate, thus making you more cost efficient. driving force fishes is 7. Avoid red tape Get Ideas, complaints, and suggestions straight to those who can implement or correct them. Avoid elaborate procedures where behind a large collaboration. they going through endless channels like in a large business. number of They gather in KAIZEN, QUALITY CIRCLES, TPM ARE YOUR KEYS TO SUCCESS innovations and large shoals to contribute to the maximize their National growth chances of through employment generation, investments and survival. The phrase 'two heads are better than one' is exports. Indian SMEs are making tremendous progress well known and in this case 'hundreds of heads are in Industry, Service, Retail, IT, Agro and Food better than one'. Shoaling multiplies the number of Processing, Pharmaceuticals, Precision Engineering eyes and the directions in which they are looking. and Manufacturing Sectors. Collectively the shoal can spot a predator or prey much more efficiently. The probability of a predator The business world is a vast ocean and the biggest being seen before it attacks is increased. Co-ordinated companies are the Shraks- they are big and powerful movements of shoals can deter and even in some and can guzzle any Fish that can quench their hunger,

cases prevent predator fish from attacking. Another advantage to fish when they shoal is that it is thought that as a group they may be able to reduce drag and therefore be able to swim more efficiently. Congregating in a shoal of MSME like an Association or confederation, the MSMEs can also leverage the same advantages. They can spot predators and prey, i.e. Threats and opportunities more efficiently and use them to their collective advantage. These could be changes in the business environment like the entry of a big corporation, legislative changes, new product and processes or new technology. Once a Threat is identified, the tactical use of the collective might of MSMEs is the key factor determining survival or doom. The three most important roles that an MSME association needs to perform are: ability to service their members; capability to positively influence the external environment affecting MSMEs and capability to plan and execute MSME development initiatives. This makes the issue of associations capacity building an important area to focus upon The corporate history is replete with examples where the collective might of MSMEs have borne legislative changes critical to their survival, however there is tremendous scope for improvement on this front. Small businesses face a number of challenges in competing with large companies that have the ability to mass produce goods and distribute them on a large scale. Mass production is often more efficient than small-scale operations, allowing bigger companies to set lower prices and still offer higher pay and better benefits to employees. On the other hand, small businesses typically have an advantage over larger competitors in areas such as complexity, specialization and consumer confidence. Small companies can specialize in small, specific market segments known as market niches to provide value to a select group of target customers. For example, an entrepreneur designing pet products could focus on making products for small dogs or specific dog breeds. Another example could be that of a Printer who can specialize on a specific requirements of a particular industry even if the volumes for the same are not large. Since such packaging does not have a big market, the bigger organization will not be able to cater to the small runs thus leaving the field open for the smaller fish. The margins on such products are generally higher than the mass products. Focusing on a niche market results in higher quality products that do a better job of fulfilling consumer needs. Niche markets provide a smaller business with enough revenue to continue operating, while large companies typically need a

broad customer base to make enough sales to cover costs. Small businesses cannot spend a lot of money on reputed consultants to provide big ticket solutions to business problems. This, on the face of it appears to be a big weakness; you scratch the surface and the reality is somewhat different. Change is the only constant in the ever changing world. Businesses need to adapt to the change quickly. The faster they adopt the change the more beneficial it is to them. There is though a risk involved in any change. Big businesses cant afford to take the risk of doing anything that isnt tried. They depend on these highly experienced consultants or agencies. That comes with a big cost because big agencies have big overhead. I do not intend to undermine the professional competence of any of the big consultants; I just want to highlight that because the MSMEs do not have deep pockets they have to depend on alternates which invariably lead to innovation and much better value for money. The pressure of not having the expert to guide you puts pressure forcing them to use their full potential. In a small business, sharing good ideas is easier as managers and owners are more visible and accessible. Employees are more likely to have avenues to share their ideas and be a part of any troubleshooting that occurs. More often than not, an attentive quality conscious workforce prevents trouble much before the need for troubleshooting. A small business has much better control over their output and interaction with clients than a bigger organisation. SMEs have the distinct advantage of being able to change plans or strategy much faster than larger competitors. A product can be brought to market more quickly when you have only a few people involved in its creation. A larger company must involve many people and processes in product development, slowing the process and giving you an advantage. A small business will typically be in a position to check products and correct any issues more quickly than a large business. This is good for crisis management and minimising risk, as well as for adapting your product according to feedback. Simplicity is one of the primary advantages smaller businesses have over larger companies. Large businesses tend to have complex bureaucratic structures that make it difficult for managers and employees to communicate. For example, a big corporation might have several levels of management between the employees and the chief executive. In a smaller business, the owner can directly oversee operations and communicate with employees. Larger companies are also typically subject to more

government scrutiny and regulations than smaller ones are. Being close to the customer is important for success in business, and a small business is frequently much closer to the customer than a large one. A small business can meet with the customer more frequently and develop more of a personal relationship than a large company. Studies across the globe have proved that people trust small businesses. Customers feel as if they're less likely to be forgotten and are more important to the "Mom and Pop" shop around the corner than to the big Supermarket at the AC Mall. This trust keeps clients coming back, bringing repeat sales. Trust also extends inside the company, as employees work face-to-face with coworkers every day. Seeing familiar faces, shaking hands and giving greetings builds this important trust factor. A large company has many layers and departments and often has procedures that prevent close contact with the customer. Big businesses frequently spend a fortune trying to replicate the intimate personal connections that smaller businesses tend to have with their customers. From our own experience we know that customers like to feel understood, valued and special, this is a lot easier to achieve as a smaller scale business. Customer complaints can be handled faster and on a more personal level in a small company, making long-term customer relations easier and more profitable. Social media is another great facilitator for engaging with clients; the need for expensive advertising is considerably reduced thanks to the digital revolution. When customers have that connection they start to like your brand and trust your service, choosing to use you more often and recommending you to others around them. This is when SMEs can really begin to experience rapid growth in demand for their products and services. By its nature a small business is very lean. There are fewer employees in a small organisation and also fewer layers of management. With fewer employees, a smaller company has less need to lay off people in hard times and can keep the business operating more efficiently. Having fewer layers of management makes decision times much quicker, allowing for flexibility and adaptability that a larger company does not have. A lean structure means that every employee can be much closer to the business and the customer,

allowing for both an understanding of how your company works and increased customer satisfaction. If many people hold the same job title as you, delegation can become confusing. In a small company, each person is more likely to fully understand his job duties, making each worker accountable for his performance. Job accountability leads to closer teamwork, meeting deadlines and providing quality work each day. Small companies need everyone to fulfill their duties; there's not much wiggle room for catching someone else's slack. The young generation or Generation Y (Gen Y) prefers to work for businesses with fewer than 100 employees, according to research from online salary database Forty-seven percent of Generation Y (Gen Y) workers are employed by small companies, compared to only 23 percent who work for companies with over 1,500 employees, says PayScales lead economist. The average salaries at small companies are much lower -- so why are small business more attractive to the Internet generation? As per an acclaimed expert on Gen Y, Younger workers are drawn to start-ups because they offer more opportunities to meet challenges, make big decisions and work on their own terms. Research shows that Gen Y prefers meaningful work over big salaries. Gen Y workers are ambitious, forward thinking, and understand the latest tech tools. By 2025, Gen Y will constitute 75 percent of the global workforce. They are the largest generation at 80 million with natural affinity to SMEs that businesses can't afford to ignore. When you take the time to evaluate the expectation of your customer and focus your business on satisfying your consumers, you can leverage your small business advantages and nurture a loyal following. Your growth will be depend upon how well you can successfully utilize these advantages. Room for growth is an opportunity that you will lose once you avail it. As a small business you have plenty of room to grow and generate greater profit margins. Enjoy It!!!! -Ankur Chaturvedi 9830952306