The micro-business has emerged as a dynamic and vibrant sector of the economy. They have widely dispersed all across and produce a diverse range of products and services. It helps in the growth of the country. They have played an important role in providing opportunities in rural areas. They contribute and play an essential role in the country’s development. Micro-businesses have driven India to new heights through the requirement of low investment, flexible operations, and capacity to develop appropriate technology, yet they have to face a lot of obstacles. As per research, about 20% of micro-business fails by the end of their first year of commencement. 50% fails by the end of the fifth year and the number rises to 80% by the end of the tenth year.
The common stumbling blocks faced by micro-business are as under:
Lack of Proper Marketing
You are not provided with a notebook containing every minute detail of marketing and marketing strategy when you establish your micro-business. You need to learn marketing as there is high competition in the market, and would outnumber your expectations every day.
Competitions with Multinational Companies
In the present era of globalization micro business are facing great competition from multinational companies. It is not easy to compete with renowned brands like Apple, McDonald’s, KFC, etc. They don’t just sit and wait for the lead to come in. They provide quality goods at cheap prices, which is very difficult for micro-business to do so.
- Lack of Credit from Banks
Micro-business are presently facing the problem of credit from banks. The banks are not providing an adequate amount of loans and the loan providing process of banks are very long and formalistic.
Micro-business is rapidly developing but their infrastructure is poor as a result, the production capacity is low and production cost is very high.
Unavailability of Raw Materials
Required raw materials and other factors of production are not available in the market. Due to this, it is very difficult to produce products at affordable prices.
Lack of Advanced Technology
The owners of micro-businesses are not aware of Advanced Technologies of production. Their methodology of production is outdated. A unit is likely to suffer a cost and quality disadvantage if the technology adopted becomes obsolete.
Faulty management decisions and actions are a common cause of hindrance in the smooth flow of a business. Poor maintenance of plant and machinery, absence of inventory management, lack of cost control, etc are some examples of mismanagement.
Not to worry! Every problem has a solution. Here are some quick fixes for your glitches:-
Target Right Customers
You should craft an idea about your target customers. Targeting the right customers can dramatically improve your business results. Find a niche customer segment which is still underserved by your competitors and they will value your products and services, and focus only on this segment. Extreme focus on one particular segment is very important.
In the present scenario having an online presence of your business can have a huge impact on your business. Customers can check into your online store at any time, and from anywhere. This would act as a first-mover advantage over your competitors. Nowadays you can see various micro-business owners sell their goods on Amazon and Flipkart. People from all over can check these products, as a result, their sales have boosted by 7% approximately. It is better to have your website as it would add to your business’s brand value and you would have a direct distribution channel to reach out to your customers.
Mutual Supply of Technologies
Several appropriate technologies for the micro-business have been developed in various sectors. While each micro business has its strength and weakness therefore, it would be mutually valuable if already developed technologies are made available to each other.
Training and Awareness
Training and development programs must be conducted religiously for the improvement of this sector. The current running programs are not effective and efficient. There must be a better communication strategy to make people aware of the schemes.
Sufficient Availability of Credit
Our banking system does not provide sufficient amount of credit to fulfill their requirements, therefore credit must be made available according to their needs, at cheaper rates for establishment as well as for operational activities of the business.
Proper Research and Development
Proper research and development in respect of innovative methods of production and services should be done by the owners. The innovative product would be available at a cheaper rate which would help micro-business owners to cope up with the current situation of intense competition.
Micro-business provides joy, employment, and ultimate self-dependency. They are a boon and a ray of hope for Indian economy.
By Vanshika Tandon