Those days are no more when every successful business started with the same blueprint. Technology and globalization have made it much easier for growing businesses to achieve rapid growth in multiple locations at once. Building a multinational business is much easier than before but is still with some obvious challenges, but the rewards are worth it. The history of developed countries shows that SMEs can also become MNCs and that they do engage more deeply in global markets than SMEs that simply export.
In India MSMEs sometimes went to the extent of incorporating multiple companies in the same line of business so that each firm stayed within the limit specified by the law. This was a major factor that discouraged the global suppliers of multinationals from setting up shop in India, thus, denying India access to critical technologies, processes, and employment. In the pandemic times, it was the MSMEs that came forward and helped the Indian economy with their supplies and services, which made the government focus on the potential. And because of that, the government of India did make the following changes in the policies of MSMEs. With all the upcoming technologies, policies, and competition such incentives are being changed from the face of businesses in India.
Today’s MSMEs are tomorrow’s MNCs. India’s SMEs hold a lot of potentials; but they lack exposure, knowledge, awareness, and have limited sources of access to best methodologies along with best practices. As these methodologies and best practices are not available in a single window, hence MSMEs of India are advised to approach consultants for their organization’s growth. It can be either technical, marketing, finance, quality, or project consultants. Though entering into a new domain or expanding your business can be terrifying but having some knowledge already with the help of consultants, MSMEs of India promise great growth. The coordination activity is a real challenging job for them in their day-to-day affair.
Earlier, MSMEs were defined by the investment they made in plant and machinery. The Government of India has increased this limit substantially and introduced a new metric: turnover, to give these units greater freedom. Under the revised forms, the investment limit for micro industries has been raised five times to 1 crore and a turnover of 5 crores; for small industries also, the investment limit has been increased 500 per cent to 10 crores and a turnover of 50 crores; and for medium industries, the investment limit has been doubled to 20 crores and a turnover of 100 crores.
Then, MSMEs in the services sector, which had a lower classification threshold earlier, has now been bought at par with manufacturing companies.
You don’t necessarily have to be a large business to go global or cross over borders. Digitalization is the first step you have to take towards your goal to be a MNC, and it is the easiest one. Today, inexpensive technologies and services that are readily available make it possible to leapfrog over regional and national expansion.
That said, here are some of the ways where one’s MSME can transform into an MNC–
(1)Take your business online — The Internet is the perfect getaway for taking your business globally or expanding your reach. It opens up international business channels. By creating a website for your business, your service or product gains a global reach. This can even help in learning and gaining experience as now you have a place to connect and communicate with all of you geographically dispersed customers.
Social media has a huge influence and reach in these times. Don’t overlook social media in the online mix. Social media can have serious impacts on your sales to know more about the topic click here.
Several online marketing strategies can help with your MSME.
(2) Staff globally — You will need to staff for a global business. There are a lot of issues to address here :
- Do you need easy access to other countries i.e an office locally in other countries? Or can you manage by operating from India and make business trips as needed? This decision can be made according to your planning for your business with the help of consultants as mentioned above.
- Do you or your team speak the language of the local country? Or are you planning to communicate solely in English? In some parts of the world, English-only is very doable, but in others, it may be next to impossible to operate that way. Do keep that in mind while choosing and setting up offices in other countries.
(3) Make your business scalable — Scalability is a company’s ability to grow without being hindered by its structure or available resources when faced with increased production. Now the question arises how to scale your business —
- Hire strategically — Make a strong hiring strategy that will give rise to a strong team not only for today but people with a vision similar to yours who will help you to reach your goal.
- Trust between Companies — Business relationships are very common to have while running one yourself. Build strong relationships with other businesses, trusting your partners, and making your competition your ally.
- Importance to marketing — Rapid and maximum growth to your business can only be achieved by maximizing your reach and it can be possible with strong build marketing strategies.
(4) Invest in technology — Technology helps your business grow, without investing heavily in other resources. Technology, particularly software technology is a great productivity-enhancer. Consider these types of technologies as must-haves for the micro-multinational business:
- Collaboration software or platforms — These make different teams and team members work together regardless of where they may be located. They are also important for working externally with service providers and customers.
- Strong technology-enabled communications – Voice, text and Web are three important and easily accessible ways one can communicate.
- Efficiency technologies – You want technologies that drive out costs in your operations. Technology is much less expensive than human labour in this digitalized world. Technology helps you increase sales.
- Sales challenges — Being aware of your upcoming challenges can help the company by being prepared for them. Not handling those challenges the right way can lead up to damage to your profits and much more. Sales challenges for companies in 2020.
(5) Understand the tax, legal, and business environment — Not every business is prepared to operate globally or even in 2 or 3 countries. You must research the economic and business change, conduct market research, put some extra and detailed effort when it comes to the legal and tax requirements, and otherwise get your business ready for global business. Failure to meet such actions or requirements could cost you all your profits and investments. It will be a huge loss for you, in the money of course as well as in time. But good planning can help you make the right moves.
(6) Build your brand name — Building and making a multinational brand name will take a lot of hard work and time. One should strive for simplicity and clarity while building a brand name, take a local approach to implement it across regions and divisions.
- Get to know your customers.
- Offer great customer service.
- Nurture existing customers and look for new opportunities.
- Attend networking events.
- Give back to your community.
- Keep brand messages clear, consistent, and simple.
- Plan globally, implement locally.
Examples of Indian small business which are MNCs now –
- Kimirica Hunter
Rajat Jain and Mohit Jain, Founders, launched Kimirica in 2013, they were working out of a small, 100sqft room. The brothers also had bad debts and faced a huge cash crunch. Their conviction and determination helped Kimirica overcome insurmountable odds and become India’s largest manufacturer of luxury hotel toiletries and guest room amenities.
- Red Chief
Manoj Gyanchandani, Founder, Red Chief Manoj Gyanchandani started a leather shoe export business in his early 20s while he was also involved in his family’s business. In 2011, the entrepreneur launched the first exclusive Red Chief outlet in Kanpur. Since then, there has been no looking back.
It started as a revolt of farmers and now is one of the biggest dairy suppliers.
This company started as local coaching for the CAT exam.
It is a long difficult road for MSMEs because most of the MNC’s are trying to overpower the market and dominate the system. But since digitalization has made its mark. It has become comparatively easier than earlier times. Digitalization helps improve the efficiency, consistency and quality of a business. The market is full of people trying to make it big in the game. And since there is a ton of competition out there you better want yourself to be ahead of others. That is why research and read as much as you can. We at insellers, have been doing a lot of research and carrying out the implementation with our clients. We tell you the not so often talked about inspiring reverie to real stories of SMEs and startups, to inspire the Entrepreneur in you. All you have to do is Log in for more.