A lot has been talked and discussed about the onslaught of recession and the impact that it has had on business and financial markets. Many businesses that were on the rise have practically taken a backseat and moved from a profit centric model to cost centric models. A lot of small and medium business have either closed down or has merged with other bigger companies in the same line of business and found a way out. As well acquisitions and takeovers by larger companies of smaller companies have been seen happening more during this period.
In this period of difficulty arose the opportunities for many young entrepreneurs as well to take a leap into the business arena due to various reasons:-
Still the challenges that were left open earlier for the SME segment still persists today and those are:-
In a nutshell, in financial terms, SME’s still today find it difficult to come up with a proper mix of financing for its operations as it is not able to balance between loans from banks and investments by investors. What we as a financial advisor call that it is all about WACC i.e. weighted average cost of capital. So the conversion of business concept to strategy to operations, which should take a full circle, is not happening and as a result of this many SME’s are facing with the problem of closing down before even it moves to the next level of growth.