In every economy, micro-businesses are an integral part of all the luxury items that develop and are enjoyed by the end consumers. The spare and internal parts have a major impact on manufacturing a car but all that we see are the “four tiers”. Having your own business gives you a different kind of freedom and access to your working life. You are the boss of your business. However, starting your own business depends upon various internal & external factors. And the initial element which will give a kick-start to your business journey is your “idea”. It might relate to something which might be the extraction of an existing idea or might be a very raw and new one. In India, the start-up wave started in 2014 has been retreating its way back into the startup ecosystem.
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Like every coin has two sides, every business whether small, medium, or large too has its opportunities and challenges.
5 Major Challenges of Small Businesses are:
- Inadequate Finance: The inadequacy of funds acts as a major hindrance in the operation of micro-businesses. This inadequacy arises due to 2 major reasons in our country firstly weak creditworthiness and secondly scarcity of capital. Many small enterprises hesitate in taking financial assistance from commercial banks mainly due to their “weak economic” base. Ever since the nationalization of banks in the year 1969 the credit scenario has improved to a great extent. To know more visit the link: (https://www.yourarticlelibrary.com/enterprises/5-major-problems-of-micro-and-small-enterprises/40708 )
- Shortage of Raw Materials: Small business incurs a huge amount of loss and difficulty due to the shortage of raw materials and this is because of less working capital. They fail to buy goods in bulk during peak time and cannot enjoy the economies of large scale.
- Marketing Issues: Small businesses are mostly handled by the middle class or poor section of the society therefore they fail to spend a huge amount on advertising their product or services. They mostly depend upon middlemen, who pay low prices and even the recovery from the middlemen is quite deliberate.
- Less knowledge about the latest technology: Small business owners rely very less upon the latest technologies available around which can be of great benefit to them. They prefer dealing with their customer offline than online. For instance – they often go through problems of payment collection, etc but they are unknown that the presence of payment collection apps can solve this matter; apps like SpiderG can be useful to them up to a great extent only if they are aware of it.
- Poor managerial skills: It is often seen that small industries are run by poorly skilled or qualified entrepreneurs without much experience and hence they give very little thought to matters such as promotions, demand, supply, production technique, future prospects, etc. According to an official study, the major reason behind the sickness of SSI is the deficiency in Project Management.
Few suggestions are directed to solve the above problems and for the better growth of the Small Industries:
- Keeping a close check on the expenses.
- Spending less on irrelevant advertisements and marketing tools and focusing on social media for the promotion of products.
- Creating a well-organized business plan.
- Working with limited staff.
- Getting aware of the various government schemes provided to micro business people.
The growth of a nation like India highly depends upon the growth of Micro Businesses too because about 60% of the economy is covered by the unorganized sector. Their contribution is immense. But the micro-businesses faces a lot of problems among which the problem of inadequate funds, shortage of raw materials, Marketing problems, less acquaintance with the technology and poor managerial skills top the list. However, these problems can be overcome and few suggestions were also given from my end.