“Startups come with crazy disruptive ideas and MSMEs have scores of different ideas on aspects as they have been in the industry longer. When both converge, a new line of business is bound to come up. In the longer run, it will lead to reinventing the entire business,” Narasimhan Elangovan, Partner at Ken & Co Chartered Accountants elucidated at CII’s Virtual Conference on ‘The Financial Strategy for MSMEs for Business Continuity.’
Elaborating further on his point, Elangovan said that technology has to be used in a more fruitful manner and gave examples of 3D printing, virtual reality-based design, drone and autonomous transport, AI and ML and Internet of Things (IoT) that can help revolutionise the game. “Try as much as possible to collaborate. Focus on mergers, joint development agreements, sector specific reforms and the like. Unless we collaborate, we cannot fight this situation,” he asserted.
In sync with Elangovan’s views is transit advertising company CASHurDRIVE (CUD) which has been in the business for over 10 years and had collaborated with Uber Cabs earlier this year. The partnership was aimed at offering more earning opportunities for drivers via Out Of Home (OOH) advertising on cabs.
Raghu Khanna, CEO and Founder, CASHurDRIVE says that the market has been badly hit due to the corona pandemic and hence, the focus should now be on digital growth. “It is a hard time for everyone. MSMEs and startups in the advertising arena have been planning on growing digitally. At this time, everyone will have to suffer a little, be it a startup or a big company, but eventually this shall pass too. Everybody should focus on digital as it is the only platform that is still going on,” he said.
Presently the company has launched CUD Medicare to offer healthcare products. Collaborations continue with multiple vendors and SMEs for products, supplies, packaging and deliveries. “Even in this chaos, vehicles are an essential part and transportation of goods is required. So, by launching products like face guard, car cockpit, bike covers and many more, we just want people to take proper precautions and stay safe,” Khanna added.
Besides such partnerships, experts highlighted the ways through which MSMEs can draw up a prudent financial strategy during such tough times. Elangovan suggested that since most MSMEs have a huge fixed cost, the intention should be to see if such fixed costs can be converted to variable costs. “For instance, MSMEs can pay rent to landlords based not on a per month amount, but on the number of units making sales. I think this can help. That’s what online cloud solution platforms are also doing. They rent out their website where you can pay rent on a monthly basis, only for the extent to which you use it,” he added.
Some other aspects floated during the discussion included reduction of procurement costs through tie ups with entrepreneurs and group orders, conserving liquidity by curtailing inventories across the value chain and identifying whether resources invested in personal assets of the owner should be brought into the business as equity.
The discussion also hovered around the prescribed health and hygiene measures which need to be enforced strictly by the sector for better efficiencies.
Industry experts unanimously agreed that it is only innovation that can drive the business forward for MSMEs and it needs to be stepped up more than ever before.
The other attendees of the virtual conference included Abhishek Choudhary, Area Channel Head – Eastern Region, SBI General Insurance Co; Dhaval Radia, Co-founder, Rupyz.com; Sanjukta Mehrotra, Associate Vice President, Product Marketing, Aviva Life Insurance Company India and Sujata Ahlawat, VP and Head – Direct to Customer Interactive, TransUnion CIBIL.