SMEs or Small and Medium Enterprises, and are often acknowledged as the driving force of a country’s economy
How do we term an enterprise as ‘small’ or ‘medium’?
Technically, the Government of India enacted the Micro, Small and Medium Enterprises Development (MSMED) Act which defines a small enterprise as one where the investment in plant and machinery is more than Rs. 25 lakh but does not exceed Rs. 5 crore. Medium enterprises have an investment in plant and machinery of more than Rs.5 crore but not exceeding Rs.10 crore.
In our everyday understanding, mobile showrooms can fall in the bracket of Small businesses, while Health Laboratories which house X-Rays and such can fall in the bracket of medium businesses.There are also micro enterprises, having an investment of less than 25 lakhs, a bracket into which ‘Chai’ Wallas and ‘Pav’ Wallas could be covered.
It is estimated that there are 11.4 million small and medium enterprises in India. They employ close to 40% of India’s workforce which is about 28 million people. But these are just numbers. The question is, how do we sell to enterprises which form a large part of our country’s economic sphere yet contribute little around 7% to its GDP?
1. Value for money and Easy payment modes
Therein lays the truth. Small and medium enterprises do not have much money. They might not even have a source of capital and might need to mortgage their house to meet their finances. They are the courageous people who have ventured into the business world to make it big with small pocket.