Here is our 3rd part of the “SME Week Series”, where we shed light on the core issues concerned with running a SME. It will be extremely useful for all those working in the space of SME, Retail, Manufacturing Unit, Association and other relative sectors to learn innovations and new approaches in running a successful SME. SMEs need to have access to adequate information to enhance productivity and to facilitate market access. So, here are the major needs and challenges of a SME to expand business.

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An Analysis On The Fundamental Needs Of SMEs
Here is our 3rd part of the “SME Week Series”, where we shed
light on the core issues concerned with running a SME. It will
be extremely useful for all those working in the space of SME,
Retail, Manufacturing Unit, Association and other relative sectors
to learn innovations and new approaches in running a successful
SME.
SMEs need to have access to adequate information to enhance
productivity and to facilitate market access. So, here are the
major needs and challenges of a SME to expand business.
 Managing cash flow
With slim margins and limited resources, SME owners are always
concerned with ‘balancing their balance sheet’. One of the key
challenges hindering efficient cash flow in SMEs is the problem of

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late payments by customers. This poses a headache especially for
small businesses with low cash reserves. SMEs need to have a
thorough understanding of their sales margin in order to ensure
that their revenue covers not only the cost of goods but also
overheads as well as the costs of financing.
 Hiring and retaining staff
Hiring and retaining staff is an ongoing challenge for SMEs. While
you may not be able to offer the best remuneration packages for
your employees, there are other creative (and non-monetary)
means to keep your employees happy and motivated. You may
also wish to consider hiring freelance consultants instead of
taking on a full-time employee for fixed term projects with once-
off deliverables – such as building a website or designing a brand
identity for an event.

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In that case, make sure you know the key differences between
independent contractors and employees and the relevant legal
rights and obligations.
 Dealing with customer / client complaints
It is important to keep your customers happy. After all, they keep
your business going.
 Marketing your business online
Technology has presented businesses today with whole new
dimensions to market them. This however poses its own
challenges.
Customer expectations have changed and competition is no
longer local but now global. Deciding on an effective marketing
method with the most return on investment can be difficult,
especially when faced with little budget and resources.
One can use social media platforms that are free to set up to
build up an online community. The same goes for blogging and
other forms of online advertising.
 Rising costs & competition
Running a business in hubs can be a challenge with the high
overheads and strong competition. The rising cost of office rental,
as well as increased cost of production, has squeezed the profit
margin for small businesses.
Thankfully, there are ways to manage costs even in expensive
cities. While co-working spaces are often associated with startups
and tech entrepreneurs, SMEs who use co-working spaces agree

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that it may be a more cost-effective alternative to rented office
space. Co-working provides you with the flexibility to scale the
size of your operations up or down rapidly, and allow frequent
review of your terms of stay more frequently than traditional,
fixed leasing arrangements.
 Protecting ideas and commercial assets
Intellectual property (IP), which comprises of trademarks,
patents, copyrights and trade secrets, is a core business asset.
Yet, SME owners neglect to properly protect their IP rights as
they are daunted by the application process, and often are
unaware of what needs be protected. As a result, SMEs run the
risk of having their ideas stolen.
Whenever your business develops intangible human creations, it
is a key that you protect your creations. Your business has
information that should remain private, such as your customer
database, financial information, and new business ideas. A
Confidentiality Agreement (or Non-disclosure Agreement) is your

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first line of defense to protecting this information. This legal
document creates a confidential relationship between your
business and any contractors, employees, and other business
partners who might get behind-the-scenes look at your
operations.
 Dealing with regulation and staying up-to-date
It is important that you stay up-to-date with the latest updates to
laws, acts, and regulation that may impact the way you run your
business.
Legislation changes frequently; and by being unaware of the
latest developments, you put your business at risk.
This is especially true for SMEs who are looking to expand
business. They need to fully grasp the relevant legal and taxation
requirements of the concerned place.
 Challenges faced by SMEs while deploying digital
solutions
Some of the major challenges still faced by Indian SMEs are the
lack of technology knowledge, funds, ROIs, and access to digital
talent. Although most SMEs are keen on adopting newer
technologies, a lack of awareness and poor infrastructure holds
them back. It is the implementation of these technologies which
is a major challenge for these businesses. They are unsure of
which technology model to choose since they have varied
requirements in terms of scalability, flexibility, and costs.
If you’re stuck in traditional business, expose and immerse
yourself in the new technologies surrounding you like the

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Internet, smartphones, and social media. Companies now offer
affordable digital solutions that make digital business accessible
and easy to use. For example, one may use Shopify, an e-
commerce platform that businesses can use to create their own
website.
Takeaway
SMEs play a huge role in a country’s development. By involving
SME’s opinion at various fronts, make them more eager to learn
vis-à-vis various other aspects, which by and large, create
interest among SME’s to venture new projects leading to growth
of a sector, a region, a country and its respective economy.