Background: To drive business growth, optimisation and transformation, do SMEs need external support units? Saurav Kumar explores in this article.

Before we answer this question as yes or no, let's first understand what we mean by ‘support units’. Support units are structural units either funded by the government or run and organised by a private firm that is in the business of providing high-end strategic SME services, for instance a consulting firm run by experts. It is highly important here that ‘support units’ be run by a mature firm with people who understand the ins and outs of business. These support units may consist of government facilitators, academicians, and corporate experts who together create a learning experience for SME leadership and keep them abreast with recent trends, technologies, help them create right business models laden with optimisation and transformation principles and the right kind of networking.

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The question is do we have support units for SMEs in India and outside India? There are few government initiatives for SMEs but they are not exactly what can be considered as support units. Neither are there private institutions exclusive for SMEs who can work with them, optimise their business models, transform their way of working which can create future companies and in-process educate promoters. There are educational programmes for SME leadership and family businesses available online or at the campuses of certain prime institutions but knowledge ‘gyan’ alone does not give promoters enough tools to steer changes, transformations, behaviour and structure of their organisation. And this is where these support units can play a more practical role in SME operations and future roadmaps.

What about ‘support units’ outside India? The answer is not binary. SMEs in developed economies to some extent attract in-house good resources for optimisation and transformation because of the completely different market situation. Though, realisation on the ground needs more external consultation and a ‘challenger’ view. However, SMEs in developing economies find it difficult to get good resources and hardly can run transformation and optimisation programmes within a company.

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To summarise, yes, SMEs need support units for their operations optimisation, transformation roadmap, for their growth both in terms of revenues and volumes, for their increased margins, or for building a new strategy. It is not that promoters can’t do any of the above but only because SMEs do not have enough resources and knowledge to experiment with hit and trial methods for a longer time and therefore, earlier the better approach keeps SMEs flexibility advantage directed towards innovation and growth.

Till government-funded support units do not become fully active and practical, SMEs need to take external consultation approach to fund their growth.

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