As India is aspiring to be a $5 trillion economy by 2025 and SMEs are one of the major participants in achieving the milestone.


Various studies and research prove that Small and Medium Enterprises has significant importance in creation of employment and economic growth. The key difference which distinguishes the SMEs from elite companies is the crucial role they play in making the business and uplifting the society altogether. There are approximately 42.50 million, registered and unregistered SMEs which is 95% of the total industrial units in the country. The SMEs creates employment for around 106 million people that is roughly 40% of the India’s workforce without huge capital cost. They contribute 50% to India’s GDP which is second major contributor after agriculture along with that they also help in industrialization of rural and backward areas, reduce the regional disparity and assure more equitable distribution of income and wealth.

As India is aspiring to be a $5 trillion economy by 2025 and SMEs are one of the major participants in achieving the milestone. Currently, the GDP contribution of SMEs is around 6.11% of manufacturing unit and 24.63% of the service sector which accounts for 45% of the total Indian manufacturing output resulting formation of the fixed assets at INR 1,471,912.94 crore. The roots of SMEs are also deeply rooted across the globe for it accounts 40% of the total exports. But, there are also several challenges they counter in their day to day lives including shortage of working capital, raw materials, scarcity of resources, etc.. We will understand dynamics of it with the help of SWOT matrix. This will help make the depiction pristine:


SMEs in manufacturing enterprise requires the investment between INR 25 lacs to INR 10 crore where as to set up service enterprise the required investment is between INR 10 lacs to INR 5 crore which is allows the entrepreneurs to start their businesses without injecting huge capital and able to explore the markets without having to worry about geographical limitations.


It has been observed that SMEs lack the financial adequacy and skills to undergo constant innovation and upgradation in their product and services as a result their product/ services become obsolete after some time. The key reason for this weakness is also lack of credit facility available for them. To counter this problem, SMEs should focus more on updating their digital skills for example learning Social-Mobility-Analytics & Cloud is vital for knowing consumer’s preference and needs.


Establishing the strong online visibility strengthen the chance of SMEs to target and achieve big client base even across the globe. The sector has witnessed a 60% boost in business via a mobile app which shows that people are purely capable to take the technology well. But, to catch the big fish, there is need to match the skills to the up-to-date level which opens all the boundaries of market and provides the opportunities of business expansion, diversification and product development.


With increase in digitization, internet penetration has surged so high that if not handled carefully it may backfire all the opportunities because mere launching, sustaining and growing at a minuscule rate is not enough.  Entrepreneurs and their teams are required to adapt and adopt at a fast pace to give their business a competitive edge. Advertising and communication has become so crucial aspects of marketing that the service of a business doesn’t get over after the selling of a product, the need of getting in constantly in touch with customers has become important. Communicating them about the latest product/services, sales, discounts and other offer which they might like, opens whole new departments within the enterprise. SMEs suffer advertisements, promotional activities, SEOs, SMOs, etc. in comparison of other competitors who are having huge funds.

There are number of rooms for growth and opportunities, to know, the entrepreneurs must dig deep into it. The need is to make the optimum utilization out of Government schemes and policies which many of them aren’t aware of due to lack of awareness. The internet allows businesses of all sizes and from any location to reach new and larger markets and provides opportunities to work more efficiently but it also brings the problems related to data theft, data transfer, piracy etc. It is imperative to know why security is not luxury but prerequisite for functioning smooth and safe, for this, the entrepreneur should acquire proper in training, adequate information about protection of computers and network from cyber attacks etc. In this way they would be in better position to keep their idea, process, analytics safe with them.

Future Trends

SMEs hold the potential of being the future of India if it is directed and channelized properly because many of their problems remain unaddressed. Even they have plenty of opportunities in front of them waiting, they can’t grab until they know how to capture it and deliver it well. Now a days, businesses are driven not by entrepreneurs but customers, if the SMEs won’t be able to maintain the client relationship and fail to meet their needs, it would not grow last. The SMEs should understand the dynamics of world’s business for that they need to have good money back up to support and hold their dreams. Lack of easy access to credit has, however, continued to dog such firms which unfortunately discourages them to stand up again. Further, SMEs restricted only as a supportive staff of the big giants and not able to emerge themselves and creating their separate unique identity.

According to the monthly survey of SME page on Facebook,

The study was conducted to survey for which of the following do entrepreneurs use online tools or platforms.

The result showed:

  • 84% of the entrepreneurs make use of online platform to showcase their product and services to capture the targeted market
  • Around 83% of the entrepreneurs provides necessary information on the social media and website to make conversion
  • 81% of the entrepreneurs prefers to advertise their products and services to the potential customers to attract
  • While 59% of the entrepreneurs manages internal business process like finances, communication among employees

Amid new technology and trends the major challenges they are facing are:

  • Attracting and retaining customers
  • Maintaining the profitability
  • Increasing Revenue
  • Developing new product, and
  • Securing financing for expansion

To wind up, the global market is a touch away for all Small and Medium Enterprises, lack of credit stops them to do all essentials. If encouraged well, the business can outshine worldwide while maintaining socio-economic development.


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