In the latest Budget 2019, the Ministry of Finance has announced a lower corporate tax rate of 25% for companies with an annual turnover of Rs. 400 Crore, an extension from the previous limit of Rs. 250 Crore. The Finance Ministry has also set up an Interest Subvention Scheme of Rs. 350 Crore. It will allow entrepreneurs, who are registered with GST to avail up to 2% subvention on interest payments of loans.
The government realises the massive potential MSMEs hold in accelerating the nation’s GDP growth. Therefore, it is setting the course for exponential growth in the MSME sector and aiming to catalyse an annual contribution of 50% from the sector. Current contribution is around 29%.
Small businesses are the breeding ground for enterprises that later flourish. Consequently, setting up a small business is challenging in terms of finance, organisational and marketing know-how, workforce management, etc. Therefore, knowledge on how to grow your small business is quintessential for evolving it.
Why is knowledge important?
There are no strict rules which businesses need to follow to grow. Each business contains its set of factors which contribute towards its growth. These can be the products or services offered, the target clientele, geographical specifics, workforce efficiency, etc. The permutations and combinations of how to grow your small business are endless. However, profound knowledge of those factors can form the basis of efficient and prompt execution of your business objectives.
Entrepreneurs always have access to vast reservoirs of knowledge. The only requirement in creating a growth plan for your small business would be to tap into those sources of knowledge, assess the same, and harness whatever is relevant and profitable to your enterprise.
These sources of knowledge are –
- Employee and supplier knowledge: Your employees are your most significant assets. They witness the business processions in close quarters, and almost every single employee forms some ideas on how to improve profitability or how to build your business brand. Similarly, suppliers have first-hand knowledge of your sales funnel and can provide valuable insight into what they think could improve the efficiency of your distribution model.
- Customer feedback: A business thrives on its customers. Therefore, customer feedback or market knowledge is an invaluable tip to grow small businesses. It helps you to tailor your services and products according to their conveniences which would aid you in developing a sustainable footprint in the market.
- Industry knowledge: Knowing the industry your business belongs to can help you keep up with the latest developments in that specific market. Also, assessing your competitor’s business conduct and which strategies are proving successful for them will help you to know how to grow your small business. Along with these, efficient market research can help you develop ingenious methods to bid better than your competitors.
- Business environment knowledge: A business never runs in isolation of its environment. The economical, geographical, technological, societal, and political components present in your business environment indirectly affect your business. Thorough knowledge of these matters will build a base for your business and marketing strategies. Efficiently culturing this knowledge will help you to be a successful small business owner.
- Research and development: This factor is ubiquitous in every successful enterprise. Conducting scientific research and collating empirical data of your customer base, market conditions, and supply chain could exponentially improve your business. However, research and development costs significantly and might prove expensive, given a small business has limited capital. Hence, you can avail an MSME loan to meet your R&D expenses. You can save on interest by availing interest subvention of up to 2% offered by the government.
Such knowledge is important to help you streamline your entire business process. Through proper analysis and usage, you can map an efficient path for how to grow your small business.
Other than these sources, you can also gather information by increasing your industrial connectivity and network in events and seminars. You can visit events which are attended by both veteran and novice entrepreneurs. They can provide tips to grow small businesses which did not occur to you or a modified version of your idea which is more efficient.
The importance of knowledge in any business is paramount. It develops you as an entrepreneur and proper usage paves the way to conduct your business operations with utmost efficiency.