Advantages and Importance for SME’s in Coming Days
SME – Small and Medium Enterprise
Developing small and medium enterprises (SMEs) helps to achieve sustainable growth as a centralized theme. SMEs play a vital role in the country’s overall production networks and they are core to the economic growth of developing countries. The contributions of formal SMEs are 50% of total employment and 33% of the national income of emerging economies. While including informal SMEs the percentages will be increased. Finance accession is the main constraint to SME growth, without that many SMEs are declined. There are many advantages for SMEs which are described beneath.
Encourages Team Spirit
Big companies employees do work on different floors and buildings. Though many work for long years, meeting one-to-one would not be possible. Always department competitions and staffing will be pervading among the people. But in Small and Medium-sized companies, the owner recognizes every employee and understands their importance. Cross training will happen in the case of allotting one employee in another place in case of vacation, illness etc.,
Availed with easy loan
There are numerous loan programs available for SMEs whereas the big companies don’t qualify for such loans. The loans are backed up with Small Business Administration. Even a local bank accepts the loan application of SMEs. The Small Business Associate guarantees the loan for SMEs but they don’t directly provide the loan.
SMEs direct involvement
SMEs can well control over their output and customers interaction than the biggest companies. For instance, the owner can be in a position to scrutiny the product quality and rectify if any issue occurs thus the risk is minimized and crisis are prevented on the earlier stage itself. Small business can directly contact with potential customers to promote them freely. Out of the digital revolution, the cost of advertisement is cut down. Plenty of costs effective, professional solutions are available for start-ups and SMEs to promote their catchy brands and other marketing materials.
Taking immediate decision
SMEs can quickly react according to the marketplace changes. It does not follow with an official hierarchy which might slow down the decision-making process. If the business owner tends to see there is a wide opportunity to challenge with his competitor, it can be done at a moment since he need not wait for others approval. An employee in an SME is given the open opportunity to learn other department works, if and only if he is quite knowledgeable. But big companies have its own limitation for employees work description which is a great obstacle for an employee’s growth.
Importance of SMEs
SME establishment is considered to be important at present days. They involve in job creation in this modern day economy. In recent times it would have been noticed that the unemployment reduction all over the world is due to the lots of emerged SMEs. Out of the SMEs contribution, there is a significant growth in GDP and proper money flow across the economy is noticed. SME charges lower rates to their clients by providing a quality business. When the state economy is in better condition, the SMEs will flourish. If the economy is volatile, the SMEs will face a risk of going down, as they survive within a small budget. SMEs boost the country economy by affording extra revenue and employment.
It has been concluded as SMEs offer multiple advantages and being a source of growth for several countries. SMEs in the coming days will involve with unforeseen revolution for improving our country’s economic growth.