Problems Faced By Small Businesses In India?

Problems Faced By Small Businesses In India?

20 June, 2023

Heading a small business in India can be a challenging endeavour. You might run into various problems that can make or break your business. However, most of these issues can be resolved with the right knowledge and tools. To do so, you must be equipped to identify managerial and business challenges and look at them from a problem-solving perspective. This article will help you learn how to spot problems faced by small businesses and how you can overcome them.

What are the Problems of Small Businesses in India?

As a small business owner, you might run into the following challenges. The list given below will help you identify business problems and apply solutions to overcome them:

  1. Less Capital:

    To provide quality goods and services, your business requires an influx of capital. However, often you might lack capital because you are unable to get investors on-board. You might also consider borrowing from NBFCs at higher rates which can become an obstacle in the future. Equity sell-off at an early stage is also a bad idea, as it is the most expensive form of capital that you own.

    Solution: To ensure that you have funding when needed, you can check up on government-aid in your state. You can also maintain cash flow by crowdsourcing. Debt-funding, through Business Loans, are also a great way to grow your business intelligently, and if done the right way, can lead to sustainable growth for you and your company. Our loans for business can help fund your growth.

  2. Production Line:

    To ensure that you make the kind of profits required to consider your business successful, you have to provide quality products. To that end, your products should not be inferior to competitor offerings and be satisfactory for your customer base.

    Solution: To ensure that you provide your clientele with top-of-the-line products and services, you must maintain your production line accordingly. You should invest in new technology to help you operate your production line at lowered costs without compromising quality, while also investing in research and development to keep quality standards consistently high.

  3. Time Management:

    One of the major problems you might have to deal with is the effective management of time and resources. To ensure that your business grows healthily, you have to have the managerial skills to juggle time and work. If you fail to do so, your company can fall behind with a competitor ready to take your place.

    Solution: Hire people who have the experience and expertise needed to focus on operational aspects of your business. They can manage operations while you look at other elements of your operations such as finances, strategy, marketing and most importantly – growth.

  4. Lack of managerial skills:

    One of the more significant problems faced by small-scale industries is the shortage of efficient managers. Any strong business requires staff with the ability to manage multiple facets of the job. Not having such employees can lead to a lack of organisation and haphazard execution of operations.

    Solution: Make sure to hire the right people with the required potential managerial skill set at the hiring stage. Provide training and mentorship opportunities within the company so that people can grow. Recognise their achievements and provide feedback proactively to keep them motivated.

  5. Marketing Issues:

    As a small business, your products and services can get drowned out in the competition pool if you do not market yourself effectively. Simply creating good products does not ensure that customers will choose to buy them. You need to market yourself and your business effectively.

    Solution: Develop a clear and precise marketing strategy. Identify marketing and sales channels. Then hire and leverage the right staff to help grow your business by bringing this strategy to life in the real world. Test it regularly and optimise your approach till you find a formula that works for you. Businesses that tend to innovate more on this front tend to be noticed more and may experience better growth than others.

  6. Cash flow management:

    Apart from filing taxes and obtaining legal permits, you also have to maintain your business accounts and cash flow statements. Using balance sheets, you can analyse your business’ finances and see how your cash is working for your business.

    Solution: Make sure your cash flow statement and balance sheets are accurate and up-to-date. Analyse these statements, with the help of expert staff, mentors and even consultants if needed, to identify the condition of your capital and make decisions accordingly.

HDFC Bank recognises the importance of organisation and streamlining when it comes to running a small business. Hence, we at HDFC Bank present to you a one-stop powerful app that solves all of your banking and business problems. With SmartHub Vyapar, we have created a holistic platform for small businesses that can help them thrive in this digital age. From customer payments for goods and services, to vendors and supplier management, it can all be done on SmartHub Vyapar.

Click here to Download SmartHub Vyapar for your business.

Read more on financial Tips for Managing Your Businesses Successfully

​​​​​​​*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. HDFC Bank SmartHub Vyapar is available to only Individual & Sole Proprietorship entity and for select Current Account variants only. For other entity types, please connect with the nearest branch.

Click here to Download SmartHub Vyapar for your business.

Related Articles
Important For Your Business