DOWNFALL OF MSMEs IN INDIA
The Micro, Small and Medium Entreprises (SMEs) have a huge impact on the Indian economy. The MSME sector contributes around 8% to India’s GDP. One of the big reason, behind the failure of small businesses is demonetization and the GST rollout.
Ever since the concept of GST came into the picture, there are so many losses in small business. Entrepreneurs have to pay huge taxes on selling and purchasing goods. Their returns are less than they had invested. Due to Gst, some business got shut down, some are on huge losses. So many entrepreneurs were not happy with the concept of GST, as it had caused a huge loss in their business, leading to a decrease in the Indian economy. Due to the shut down of businesses, many people lose their jobs.
There are other reasons which have caused the failure of SMEs. These reasons may help you if you are thinking of a startup. Other factors behind the downfall:
1. Lack of Planning:
Many Entrepreneurs start their business for just earning to become a millionaire. They just think of huge returns without having a proper business plan. If you are really passionate about your business and have a goal to execute your business then you must go for starting your business. Not having a proper plan of business, you will surely fail in your business. You should see to every aspect of your business from financial resource to management.
2. Lack of Market Knowledge:
You should have adequate knowledge about the market, trends and your competitors. You should do an analysis of the market and make a report of it so that it will help you to grow. If you are thinking of business, then you must study the market trends first, and make proper planning of starting it.
3. Lack of Capital:
It is crucial to understand that finance is an important resource for any business. It takes one to two years for the new business to establish. Initially, the returns will be less than your investment, so you need to have an adequate amount of money for establishing your business.
4. Lack of Innovation:
Having a great idea and succeeding in it is difficult. Many Entrepreneurs lack in ideas, just for earning purpose they start the business and fail to succeed in it. But great ideas sometimes lead to great success. So if you have an idea then work hard upon it and succeed in it.
5. Lack of Management:
Every company needs good management and good employees to make the business in success. Good leadership qualities are needed to manage the business. Many businesses lack proper management and fail before even getting to start off.
Starting a business or startup, must-read above points and follow them.
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