The SME full form stands for small and medium enterprises. These companies maintain a certain threshold of revenue, number of employees and assets. Apart from the small and mid-sized companies, there are companies who employ only 10 employees, known as micro enterprises.
Definition of Small and Medium scale Enterprises
Small and Medium scale enterprises are distinguished by their capital. Small scale enterprises operate with a capital of minimum of Rs. 25 Lakh to a maximum of Rs. 5 Crore. For service sectors, it works on a total capital of Rs. 10 Lakh to Rs. 2 Crore.
Medium scale enterprises in the manufacturing sector works on a total capital of Rs. 5 Crore to Rs. 10 Crore. Service sector enterprises usually maintain a capital of Rs. 2 Crore to Rs. 5 Crore.
The workings of SMEs
Economic backbone
The SME sector is one of the most dynamic parts of the country’s economy. In fact, in India, this industry has grown steadily over the past 5 decades. They offer large-scale employment opportunities at a relatively lower capital cost. Moreover, these organisations help in the industrialisation of economically backward areas. As a result, the regional imbalances are reduced and a more equitable distribution of national wealth and income gets executed. SMEs also act as ancillary units to large industries. They contribute to the socio-economic development of a country’s infrastructure.
Nation’s overall development
SMEs play a crucial role in a nation’s progress and development. Contributing immensely to a country’s domestic production, low investment requirements, export earnings, low intensive imports, they help in the development of indigenous technology. Moreover, they help to generate new entrepreneurs by sharing knowledge and training.
Perks that SMEs enjoy
Owing to their contribution to the country’s economy, these enterprises are offered incentives and favourable tax treatment. The SME loan has been designed to allow small businesses avail loans to fund their expenses. Moreover, the government uses a range of beneficiary policies to organise these small businesses. These customised loans help in the profitability of the SMEs.
What is the current scenario of SMEs?
There are about 42.50 million registered and unregistered SMEs in India. They employ around 106 million individuals which accumulate to 40% of the country’s workforce. Producing more than 6000 products, SMEs have maintained an average growth rate of 10%.Â
Seeing this sector’s contribution to India’s GDP and entrepreneurship, the Indian government has launched several initiatives to further their advancement. Some of the key schemes include –
- CGTMSE: Credit Guarantee Fund Trust for Micro & Small Enterprises
- EPCG: Export Promotion of Capital Goods
- CLSS: Credit Linked Capital Subsidy SchemeÂ
- MDA: Market Development Assistance
Recently, the government passed a bill stating that the classification of SMEs shall be based upon their annual turnover and not upon the investment made for business operations. With the implementation of newer economic reforms, SMEs will play a much more significant role in future.
What are SME Business Opportunities to Start with Low Investment in 2019:
If you are a working professional and now want to start your own business, then you have plenty of opportunities. Small scale businesses that are successful can now be your career choice and excel in it.
Some good small business ideas are also suggested here to start in India. If you do not want the conventional career path of a job, then you too can become a successful entrepreneur. You may select one from the best business ideas that are on the growth in India currently.Â
- Travel agency – Tourism is a lucrative space in India which has seen a boom in the past 10 years.Â
- Breakfast Joint – You can easily start a breakfast truck for office goers. Food is something that never goes out of business.Â
- Party Services – Birthdays, anniversaries and get-togethers are held throughout the year. You can offer catering or decoration services for such parties.Â
- Stationeries – Office and school stationeries are much in demand. Both elders as well as kids can become your potential customers. A local stationery store does prove to be a good start.Â
- Photography – If you are skilled in DSLR photography, then this field can be a profitable venture. Glamour photography is desired by many Indian brides before their weddings or for modelling purposes.Â
- Nurseries – The present lifestyle of peoples around make the nurseries business demanding. Day by day the scope of this business seems to grow wide as different sectors and business firms like Bouquet shops, Craft business firms, Containers raise requirement and will create a great business for the owners. Â
- Interior Design – If it comes to earning and benefits for interior designers, you will find it is continuously varying widely. As the technology and creativity is continuously getting in effects of our daily lives their demand to design commercial as well as residential property is continuously increasing. An interior designing firm in a metro city can easily earn a good revenue if starts business.
- Lifestyle Products – If you start your own manufacturing unit to manufacture daily use lifestyle products like wearing accessories, shoes, slippers, soap, detergent, paste, spices, packaging foods and others then you are on the right path. The most beneficial side to start these business is that with a low investment and low price machinery you can set up your business and can start with.
- Gym Centre – Now a days people like to join the gym with various motives. They workout for People work out for at Gyms for muscle building, health, weight control, stress relief. It is like included in their daily routine to join Gyms and workout. Even people from small town areas now also facilitate gym centre. It can be a good business one can start with. For equipment arrangement yes it will cost you but later you can have a higher revenue.Â
How can SMEs grow their business operations?
Once you start and prepare your business for the growth phase, you will need substantial funds. These funds will help you purchase the latest equipment, expand your infrastructure, handle all advertising and marketing tasks.
You can overcome your budget issues by taking up an SME Loan. The SMEs are known as India’s ‘engine of growth’. Better opportunities and rapid innovations have made them a lucrative sector today. They are thriving and taking the country’s success ahead.
Aditi Ahuja is a noted Financial Consultant and Adviser. she is a tech blogger and writer too. She loves to keep updated herself on this and one may get the best suggestion in both of the industries from her. She loves to travel in her free time. Here are some good to read a blog like best phones under 20000, laptop buying guide and more, that you can find interesting if read.