The BSE SME is a trading platform created by the Bombay Stock Exchange (BSE) that provides an investor-friendly environment in which small and medium-sized enterprises (SMEs) can be listed as trading companies. Through this platform, SMEs under the unorganised sectors across India can access regulated and organised sector benefits.  

BSE SME offers enormous opportunities for the following market parties:  

Entrepreneurs: It increases capital for the development and expansion of their SMEs in a cost-effective manner.  

Investors: It allows investors to locate and invest in excellent companies in the early stages and on the way out.  

In recent years, innovations in patenting, design, testing, and issuing patents and trademarks have led to the development and expansion of “business opportunities”, making India a centre of innovation. This has also started India on its way to build a robust Intellectual Property Rights infrastructure.

Government body Controller General of Patents, Designs & Trade Marks (CGPDTM) has quadrupled the number of patents and trademark registrations in the past five years, taking “extreme caution” to expedite patent testing for SMEs, businesswomen, and start-ups.

Who is BlackBuck?

BlackBuck is India’s largest trucking platform. Founded in 2015, it aims to organise and simplify the trucking industry for both, shipper and trucker. The platform has been a pioneer in bringing the offline operations of trucking online.

The platform also aims to reshape the infrastructure around trucking to facilitate insurance, payments and financial services. With just one click, truckers can book a load and move at capacity. Along with this, shippers can book a truck of their choice, of any size, at the right time and at a right price.

By keeping the application minimal for the not so literate people, the app operates through Google maps. The drivers and truckers can accept work and navigate in a seamless manner. For the clients, they can install the similar app to make their respective bookings and BlackBuck matches the demand with available trucks and drivers in the area. Just like Uber, BlackBuck connects shippers with trucks.

Inefficiency Problems in India’s Truck System

India’s Trucking Industry is the most marginalised, unorganised and inefficient sector and is critical for the country’s economy. This problem is dragging India’s economy down as this contributes around 14.4% to India’s GDP. This sector is also the highest employment generator as 85% of the transportation community is constituted by small operators.

Being a major choke-point in the supply chain, the trucking industry functions on uncoordinated set-pieces causing all the inefficiencies and disparity in their operation. The reason behind this are:

• Highway and Roads conditions that can hardly be termed comfortable for driving. This causes delays and is also responsible for breakdowns of trucks and heavy loaded vehicles.
• The poor vehicle maintenance is another reason for the inefficiency in the trucking industry. In order to transport maximum freight with minimum costs, truck owners neglect the efficiency of their vehicles which in return cause miserable conditions.
• There’s no standardisation of remuneration as different transport companies’ offer diversified paychecks.
• Sometimes there’s problems with authority at several checkpoints. Drivers mostly being not very literate end up in a situation where they’re caught up in state laws and have to face delays.

Amazon is determined to amplify small businesses in India. The recently concluded ‘Small business day’ event followed by the upcoming Prime Day is testimony to the fact that the tech giant won’t rest until it has done everything to revive India’s small business sector. 

What is Amazon Prime Day?

Prime Day is an online shopping event to be hosted by Amazon between the 26th and 27th of July 2021. It’s a sale event exclusively for Indian shoppers with Prime subscription. This year, Prime Day is significant because it will showcase unique products by small businesses who are listed as sellers on Amazon. Customers will enjoy huge deals and discounts and can browse through regional and handmade products by these small business sellers. 

Who is Amazon Prime Day for?

Target consumers for the Amazon Prime Day sale are mainly member shoppers with the Prime subscription. The sale is mainly targeted towards smartphone and consumer goods shoppers. Through this event, Amazon is focused on increasing its Prime membership and subscriptions base. The event is also encouraging small and medium business (SMB) sellers to showcase their wares and take advantage of Amazon’s flagship sale. 

Amazon’s initiatives for small businesses

Amazon Launchpad

An initiative that’s part of Prime Day’s push for small businesses, Amazon Launchpad will showcase products driven by innovation from up-and-coming brands. 

Amazon Karigar

Amazon Karigar will shed light on sellers listing handmade products like handloom and handicrafts. Artisans and Government Emporiums can join the Amazon Karigar initiative to sell their wares.

Amazon Saheli

Through Amazon Saheli, women entrepreneurs can sell their products. The major categories for products on Amazon Saheli include Clothing, Home Décor, grocery, kids and party supplies by women-led businesses.

Local shops

Local stores will be featured for Amazon Prime Day and verified local shops can target customers in their vicinity with unique product offerings.

Contribution and Coverage by SMB sellers

More than 2400 products will be launched by small businesses for the Prime Day catalogue. As part of the ‘Local shops’ initiative, over 75,000 local seller shops spread across 450 cities in India will be debuting on Amazon. Over 100 small and medium businesses including start-ups, women entrepreneurs, artisans and weavers will be featured on the two prime days. 

Prominent categories covered by sellers include home and kitchen, fashion, beauty, jewellery, stationery, lawn and garden, grocery and electronics. Over 50% of the sellers belong to Tier II and III cities. The Amazon Saheli initiative will feature over 90000 products from women-led businesses whereas Amazon Karigar will feature about 272 unique handicrafts. 

The Micro, Small, and Medium Enterprise sector has reached the brink of exhaustion with the onslaught of the pandemic. The situation is grim as there doesn’t seem to be hope for recovery post the second wave for small businesses without Government Intervention. In this regard, many measures are being taken by the Government, one of which is the Udyam Registration for recognition.

What is the Udyam Registration?

Udyam is a Portal where small enterprises can register themselves. It falls under the purview of the Ministry of Micro, Small and Medium Enterprises (MSME). It’s a portal where enterprises can get registered and recognised by the Government. Registration will facilitate easy access to enterprise information. It will also be helpful in quick linking with other Government schemes, regulations, and compliance norms like Income Tax and GST (Goods and Services Tax).

Why Udyam registration is important for SMEs

Udyam registration is important for SMEs due to the following key reasons

• By registering on Udyam, your enterprise can acquire business tenders.
• Your business can avail bank loans and credit at cheap interest rates of 1.5% lesser than regular bank loans.
• You can also enjoy various tax holidays and exemptions post Udyam registration.
• Small businesses across various industries will benefit from expedited license approvals, certifications, and Government registrations. Udyam registered enterprises will be prioritised over unregistered firms.
• Other benefits include subsidies on tax, tariffs, and capital as well as reduced patent costs.

Eligibility Criteria and Application Process for Small Enterprises

Eligibility Criteria

Enterprises belonging to the manufacturing and services sector are mainly eligible for Udyam Registration. Earlier, wholesale and retail traders were not eligible for Udyam. But after their recent entry into the classification of Micro, Small, and medium enterprises, wholesalers and retailers are also eligible to apply.

Application Process

Here are some crucial pointers on the application process for enterprises.      

• • Irrespective of whether a business is involved in two or more activities, each enterprise needs to have one registration on Udyam.

  • Aadhaar provision

If the enterprise is a proprietorship firm, you need to submit the Aadhaar number of the owner.

If the enterprise is a partnership firm, you need to provide the Aadhaar number of the Managing Partner.

If it is a Hindu Undivided Family (HUF) business, the Aadhaar number of the Karta must be provided.

• • The application process is straightforward and it’s a one-time compliance for businesses.

Who comes under the ambit of micro, small and medium enterprises?

The following enterprises come under the ambit of Udyam Registration.

• Micro enterprises are those having investment up to INR 1 Cr and turnover of up to INR 5 Cr.
• Small enterprises with investment of up to INR 10 Cr and turnover of up to INR 50 Cr.
• Medium enterprises with investment of up to INR 50 Cr and turnover of up to INR 250 Cr.

SME (Small and Medium Enterprises) and small businesses have been worst affected by the pandemic. To revive the sector, the government is working hard to ensure access to a number of schemes under which small business owners can avail loans with minimum collateral and paperwork. The small business sector is a 40% contributor to the Indian GDP (Gross Domestic Product). It’s important for small businesses to take full advantage of the available government schemes to help revive the economy and subsequently scale up their operations.

Mudra

The MUDRA organisation is a Bank backed by the government aimed at providing financial support for the entrepreneurial landscape of India. It comes under the purview of the Pradhan Mantri MUDRA Yojana (PMMY) scheme for small and micro enterprises in India. MUDRA is a refinancing institution that will facilitate loans up to INR 10 Lakh to small businesses via their partner institutions including Commercial Banks, RRBs (Regional Rural Banks), Small Finance Banks, MFIs (Monetary Financial Institutions) and NBFCs (Non-Banking Financial Institutions.

National Small Industries Corporation Subsidy

The National Small Industries Corporation is an enterprise by the Government of India for providing support to Indian small businesses and SMEs. Their loan scheme subsidy provides finance, market, and technology services for small businesses. Categories under the NSIC Subsidy:

The NSIC subsidy is divided into two categories namely, the Marketing Support Scheme, and the Credit Support Scheme. Under the Marketing Assistance Scheme, NSIC helps SMEs organise and participate in Domestic and International Exhibitions and Trade Fairs. They also facilitate buyer-seller meets and conduct Intensive Campaigns and Marketing Promotion Events for small businesses.

Under the Credit Support Scheme, NSIC facilitates credit from a list of partner banks. NSIC does handholding for small businesses to avail credit from these banks by assisting with the application process and doing follow ups.

Credit Link Capital

The Credit Linked Capital Subsidy Scheme provides technology upgradation assistance for Micro and Small Enterprises in India. It provides an upfront capital subsidy of 15% for upgradation of their technology. The scheme is being implemented through nodal banks and agencies including SIDBI (Small Industries Development Bank of India), NABARD (National Bank for Agriculture and Rural Development), SBI (State Bank of India), PNB (Punjab National Bank), BoB (Bank of Baroda), Canara Bank and Corporation Bank, Indian Bank, Bank of India, and TIICL (Tamil Nadu Industrial Investment Corporation Limited).

Credit Guarantee Trust Fund for Micro and Small Enterprises (CGT SME)

The Credit Guarantee Trust Fund for Micro and Small Enterprises is a government loan scheme for small businesses under the Ministry of Micro, Small and Medium Enterprises. The corpus of this trust fund is a joint effort by the Government of India and SIDBI. Under this scheme, small businesses can avail a loan up to INR 200 Lakh. Established small businesses and upcoming firms are both eligible to apply for this business loan.

Stand Up India

Stand Up India is a government run scheme exclusively for small businesses run by Scheduled Caste and Tribe members especially women. The unique aspect of this scheme is that it is also operated by Schedule Caste and Tribe members. Small businesses belonging mainly to the trading and manufacturing sectors can avail a business loan between INR 10 Lakh – 1 Cr. The loans are being facilitated by SIDBI. This scheme is aimed at empowering and fostering entrepreneurship among the marginalised SC/ST communities, especially women from these communities.

Other small business loans under government schemes

A few other notable government backed small business loans include Udyogini for rural women entrepreneurs, and the Subsidy Scheme for Technology Upgradation.

Start-Up Mortality

Mortality is rampant in the start-up ecosystem as much as investments and unicorns are. Most start-up ideas take off with a bang but fail to work out in the long run. These failed start-up ideas contribute to the mortality rate and ‘infant mortality rate’ of startups. 

Factors that contribute to start-up mortality

• A bad set of investors can easily ruin a start-up’s growth and eventually lead to its closure. 
• The pandemic and subsequent lockdowns are currently the biggest contributing factor for start-up mortality in India. 

Start-Up closure rate in the year of unicorns

The pandemic years of 2020-21 are bad for many businesses but surprisingly proved to be the best years for start-up unicorns. However, the fact remains that many small businesses and SMEs in India have and are continuing to shut shop. 

The closure rate for Indian start-ups, micro, small,\ and medium enterprises is projected at 59% for the year 2021 as they prepare to scale down, get sold or permanently shut shop this year. This forecast is wholly attributed to the lockdown related restrictions due to the second wave outbreak. 

Closures among funded start-ups

The Indian Start-Up Ecosystem has seen close to 3200 start-ups which have received funding. Out of these funded start-ups, about 385 start-ups closed down due to various factors.  

How DDD Framework reduces start-up closure rate

What’s the DDD Framework?

The Discovery-Driven-Disruption (DDD) Framework is a planning technique. It’s a management process best suited for projects with high uncertainty. The DDD framework is useful for start-ups launching new products or venturing into new markets. 

How to adopt the DDD Framework?

Adopt the DDD Framework by breaking your start-up plan into small stages. At every stage, you become aware of and pin-point any assumptions your start-up has which may have proved to be risky. Next, you put these assumptions to the test at the lowest possible cost and timeframe. 

How the DDD Framework reduces Closure Rate

It helps reduce closure rate by de-risking the firm. It also gives start-up founders a way to exit the business at the right time when signs of a possible failure begin to show.