The Hindu Business Line : Combating slowdown: SMEs urged to invest in short-term projects

During an economic slowdown, organisations, especially the Small and Medium Enterprises (SMEs), should secure short-term resources, revisit growth plans and focus only on investments in projects that give short-term benefits, according to Mr Harish Bhat, COO, Titan Industries Ltd. .

Addressing the fourth Regional Conclave on ‘Opportunities in Turbulent Times – Road ahead for Small and Medium enterprises’ here, organised by the Hosur Chapter of Madras Management Association (MMA), Mr Bhat said this will help organisations overcome the crisis due to a recessionary trend.

Tap rural base

As a strategy companies can look at the large rural base of the country as it has not been affected by the stock market so far and is set to grow. Taking the cue from the FMCG segment, he said sales in rural markets witnessed the fastest ever growth during the last four months, while the urban areas were reeling under recession.

It is essential to cut expenses ruthlessly as significant cost-cutting opportunities exist in more than 90 per cent of the expenses in an organisation, he said.

Liquidity is the key to tide over turbulent times and prioritising cash over margins can be contemplated as even little margins will support survival. Setting realistic targets, talking to customers and employees, and linking pay to performance will help tackle the crisis.

Innovative solutions needed

The Chairman, MMA Hosur Chapter, and CEO, Prabha Engineers, Mr C. Siva Kumar, said with phased economic reforms and recession posing several challenges, SMEs require innovative solutions to overcome traditional bottlenecks such as access to finance and technology and retention of talent.

Though the large population of youth is an advantage for India, 27 per cent of the population is poor. Therefore retrenchment, cost cutting and deferring investments will not help. Instead it is necessary to synchronise all energies to overcome turbulent times, he said.

More Stories on : SSI | Economy | Tamil Nadu

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page