Indian OEMs and multinational manufacturing giants in organized sectors like Aerospace, Defense, Automobile, Food, Pharma, Heavy Metal, FMCG etc have created a huge demand for MSMEs and have resulted in value added supply chain across India and in overseas markets. MSMEs gradually have become direct suppliers to these large companies at various levels manufacturing high quality products of different sorts.
Still there are thousands of manufacturing units in India which still lack adequate knowledge on how to take their business to next level. 7 tips for every entrepreneur, who is ready for making it big are:
Going forward, 10 golden rules for MSMEs to reinvent itself and experience a transformation in business are:
Create Vision, Mission and Balanced Score Card for your Business:
Business of any size from start-up, small or medium would need to write clearly defined vision, mission, values, business scope and customer focus statements. Every entrepreneur must write down these statements for his/her business and also formulate Balanced Score Card to monitor key performance indicators (KPIs) covering strategic, operational, financial and risk management goals of business.
#This rule is fundamental in reinventing a business model.
Develop Short Term, Mid Term and Long Term Business Plan
Business Plan backed up by a strong financial feasibility report is critical for a successful business. Typically, small business owners trust their gut more than a scientifically evaluated market and financial feasibility. In the process of doing business, mistakes do happen and entrepreneur gets used to those mistakes and thinks it is a part of business, which is a wrong notion. Every business owner should have a documented Business Plan for 1, 3 and 5 years.
#Business plan gives a clear path for budgeting and expense model to keep the financial risk minimum.
Develop Strategies for Business, Products, Services, Marketing & Sales
Entrepreneurs should develop best strategies for their business, products/services, marketing and sales as these strategies will ultimately help that business to define/redefine its way forward. Entrepreneurs typically know or learn strategies on their way and follow them and keep changing as they like. A documented, co-created and most importantly thoroughly assessed strategies can help business for exponential growth.
#Before any strategy is devised, it is important to do SWOT Analyses for each head as mentioned above.
Establish, maintain and continually improve Business Management System
MSMEs should build their own Business Management Systems (BMS) for all processes and use best practices across the company. BMS is driving force for achieving process quality and it is desirable for every business entity to establish good management systems which are documented and dynamically improved with times. The BMS includes Work Flows, SOPs, Policies, Good Practices etc.
#A culture of Total Quality Management can prove to be a strong foundation for business excellence.
Focus on Lean Management principles
Lean management principles can be used by any organization to keep product realization process cost effective and trigger to eliminate wastes. Lean management system is the most essential part of running a cost effective business in this competitive market. Entrepreneurs should think of low-cost automation, productivity, yield optimization and value addition to improve bottom line.
#There are tens of tools for making business productive and if implemented with a scientific approach can make business really lean and cost effective.
Build Global Markets, Branding, Protect Knowledge, Create USP
MSMEs should participate in National and International exhibitions and expose themselves to glocal market. Branding, social media networking, digital marketing are no longer buzz words but a requirement for survival in today’s globally competitive buisness environment.
#Entrepreneurs should create a USP for their business.
Maintain Fiscal Discipline and Financial Transparency
MSMEstypically do not follow fiscal discipline majorly because of using traditional methods of financial management. There are two components of financial disciple; financial and market feasibility assessment. Financial transparency takes a back seat because most of the entrepreneurs do not know how to maintain financial discipline and deviate from compliances which lead them to financial stress.
#Financial transparency leads to best financial practices, which are important for running a smooth business.
Develop, Train and Retain Teams
Developing HR strategy, hiring right people for right jobs, hiring and maintaining skilled manpower are some of the key factors in retaining talent. MSME should interact and engage with human resource to bridge competence and skill gap. The employee engagement is crucial and should be based on 3-E model (Educate, Empower and Enforce).
#Training & Development should get maximum attention as the small training sessions can accrue maximum out of those under-trained and under-skilled manpower.
Respect Society and Environment. Think Sustainability
It is important for MSMEs to focus on social responsibility, environmental performance and energy efficiency leading to sustainable future. There can be very small initiatives like energy efficiency, rain water harvesting, use of alternate fuels et al by MSMEs towards sustainability and can contribute to society in a big way.
#Thinking sustainability can sustain MSMEs for a long haul.
Remain Networked with Business Management Organizations (BMOs)
It is said, net-work is net-worth and MSMEs who surround themselves with futuristic BMOs can gain a lot in a collective way. There are many schemes launched by government and financial institutions, which can reach to MSMEs through these BMOs.
#MSME should become member of professional BMOs, subscribe to events, join forums, establish contact management system, subscribe to knowledge magazines etc. to accrue maximum benefits for their company.