The document outlines the increasing number of sick small and medium enterprises (SMEs) in India, noting a 57% rise in such firms from FY 2012-13 to 2014-15, with key factors for this decline including poor management, lack of demand, and insufficient planning. It provides statistics illustrating issues like 66% of sick units are due to demand issues and also highlights the importance of having a digital presence. Recommendations for SMEs include testing business plans, staying updated with industry trends, and creating effective crisis management strategies.

1. 1
57%
increase in number of sick SMEs
(FY 2012-13 to 2014-15)
F A C T !

2. 2
Surprising Stats
As per the graph:
•FY 2012-13 to 2013-14
witnessed 53% rise in sick
firms. Though there was a
drastic change in the next FY
which witnessed just 9%
growth.
•Rs. 33,378 cr as debt
outstanding by these firms (as
calculated in 2014-15).
(Source: http://pib.nic.in/newsite/PrintRelease.aspx )

3. 3
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But Why The Number Of Small
Business Are Declining???

4. 4
Poor Management
• 4% industries in SSI sector categorised as sick due to poor
management
• Many small business owners lack relevant business and
management experience in areas such as purchasing,
finance, account, hiring talent etc.
• Not keeping updated on latest market trends.
• Lacking regular studying, planning, organizing, planning
and controlling day to day activities.

5. 5
Non- Availability of
Raw Materials
• 12% Sick units in SSI sector due to non-availability of raw
materials
• Imports are difficult coupled with high import duties
• Poor Inventory Management
• Lack of proper equipment and machinery contributes to
11% sick MSME units

6. 6
Lack of Demand
• A lack of demand contributes of 66% of sick units in SSI
sector
• Entering a relatively unknown market without proper
research and demand analysis
• Limited local market
• Not testing the price in marketplace
• Failure to price the product in a manner to make profits

7. 7
Office Location
Not considering location factors such as:
• Customer base
• Presence/absence of competitors
• Accessibility, traffic, safety
• Incentive programs in that area

8. 8
Lack Of Planning
Lack of a well-defined business plan that includes:
• Business’s vision, goals.
• Budget and financial projections.
• Potential threats and solutions.
• Marketing and promotion efforts.
• Competition and customer analysis.

9. 9
• Biggest mistake in an age where 243,198,922 of users are
online.
• No digital presence means losing to competition in the
growing digital age.
Little / No Digital Presence

10. 10
• Absence of sufficient operating funds
• Unrealistic expectations of incoming revenues, cost of
running business and operations
• Long Gestation Period also impacts the small scale units
Lack Of Funds

11. 11
• Not testing the price in marketplace
• Failure to price the product in a manner to make profits
Poor Pricing Strategy

12. 12
• Lack of communication and collaboration amongst partners
• Not planning an exit strategy for any co-founder
Failing Partnerships

13. 13
Failing to Listen to Consumers
• Not having effective feedback methods for consumers.
• Failure to work on customer’s demands and complaints.

14. 14
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So What Can You Do?

15. 15
Test Your Business Plan

16. 16
Stay updated on the latest
industry trends and learn to adapt
them

17. 17
Focus yourself on the target and
ways to achieve it

18. 18
Pay attention to your mistakes and
learn from them

19. 19
Always keep a crisis management
plan in reserve

20. 20
And Remember...
You can always bounce back!

21. 21
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2015
Thank You !
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