By Mr Rajesh Singla
In the dynamic and competitive world of business, access to capital is the lifeblood of small and medium-sized enterprises (SMEs). Whether it’s fueling growth, expanding operations, or seizing new opportunities, securing adequate funding is crucial for SMEs to thrive and make a significant impact. However, the path to acquiring funding can often be complex and daunting, particularly for economically driven SMEs operating in challenging financial environments.
Navigating the Funding Landscape: Challenges and Opportunities
There is a growing recognition of the immense potential of economically driven SMEs to drive economic growth and create jobs. Today, Indian SMEs have multiple options to raise funds for their business growth and expansion. One unique proposition for SMEs and Startups in India is Planify – Platform which helps SMEs and Startups to raise funds.
SMEs can list their shares on the Planify platforms and raise capital from marquee investors including angel investors and family offices.
Unlocking Funding Opportunities: A Strategic Approach
To effectively seize funding opportunities, economically driven SMEs need to adopt a strategic approach that involves thorough planning, proactive engagement with potential funders, and a strong understanding of their financial situation.
- Develop a Clear Financial Plan:
Creating a comprehensive financial plan is essential for SMEs to demonstrate their financial health and viability to potential funders. This plan should include detailed projections of revenue, expenses, cash flow, and profitability.
- Identify Target Funders:
Research and identify potential funders that align with the specific needs and stage of development of the SME. This may include traditional banks, venture capitalists, angel investors, government grants, or funding platforms.
- Craft a Compelling Business Plan:
A well-structured business plan articulating the SME’s business model, target market, competitive landscape, and financial projections is crucial for attracting funding.
- Network and Build Relationships:
Networking with industry professionals, potential funders, and other SMEs can open doors to new funding opportunities and valuable insights.
- Seek Expert Guidance:
Engaging experienced financial advisors or consultants can provide SMEs with valuable guidance on navigating the funding landscape and preparing effective funding proposals.
Recent Data and Trends in SME Funding
According to recent data from the World Bank, the global SME lending market is expected to reach $3.5 trillion by 2027. This growth is being driven by increasing recognition of the importance of SMEs in economic development and the emergence of alternative funding sources.
A 2022 report by McKinsey & Company found that SMEs account for over 90% of businesses and nearly half of all employment worldwide. The report also highlights the potential of SMEs to drive innovation and economic growth in emerging markets.
Case Studies and Success Stories of SMEs Securing Funding
Numerous examples of economically driven SMEs have successfully secured funding and achieved remarkable growth with the help of platforms like Planify, an equity-based platform tailored for investments in private markets, encompassing startups, pre-IPOs, SMEs, and even Unicorns. Planify has raised 100 cr+ for Startups and SME companies in India and has provided investment worth 250 cr+ in PreIPO and Unicorns. Planify is providing 300+ exclusive investment opportunities in SMEs, Startups, and pre-IPOs at the moment on its platform. Following are a few case studies –
Bazaar India – It is a fast-growing Indian chain of Fashion, Lifestyle & Home Products, providing products, ranging from Clothing, Footwear accessories to Household items at affordable prices. The company has successfully managed to raise a whopping ₹ 40 crores as seed funds with the help of Planify.
Urban Tots – Urban Tots is among the first companies in India that manufacture toys and sell them in modern retail outlets and direct retail outlets all over India along overseas. The company has also solved one of the biggest challenges in the toy manufacturing industry by producing its molds, which were later imported from China, Taiwan, Korea, France, Germany, and the UK. The company successfully raised 26 crores on the platform from marquee investors.
These examples demonstrate that economically driven SMEs, with the right strategies and support, can overcome funding challenges and achieve significant success.
Conclusion
Economically driven SMEs play a vital role in driving economic growth, creating jobs, and fostering innovation. By adopting a strategic approach to funding, SMEs can unlock the resources they need to achieve their full potential and contribute to a more prosperous and equitable world.
(The author of the article is Mr Rajesh Singla, CEO & Co-Founder, Planify, and the views expressed in this article are his own)
