Business friendly legislation for Small and Medium Businesses

Small and medium businesses continue to play an important role in country's economic development and higher level of employment. Generally, in many economic sectors, some of the large businesses control and dominate the market share while a few small and medium enterprises, struggle to gain a foothold. The major reason for growing gap between them is lack of business friendly laws that simplify the business process and support the small businesses to attain equal footing. There is a need to realize the importance of SMBs, encourage the entrepreneurship among the local residents as well as attract the capitalists of foreign nationals to bring in their investments and improve the situation.

Barriers to the growth of SMBs

Small and medium businesses are major contributors for regional economy, despite their challenges in many aspects such as breaking into new markets, difficulties in finding qualified and skilled workforce, government regulations, acquiring finance & funding, indirect labor costs, limited access to foreign markets, uncovering the technical demands etc. These challenges often waste lot of time and resources which could be otherwise utilized in increasing the productivity, eventually augmenting the business cost and hindering the growth of SMBs. It becomes hard for these small businesses to face the rising competition and compete with the larger firms unless they are supported by flexible business friendly laws by the government.

Encouraging SMBs with business friendly laws

Small and medium enterprises play a key role in creating wealth, stimulating economic growth and facilitating jobs for the unemployed. SMEs generally tend to be confronted with many financial and regulatory concerns that remain a major obstacle in their growth. To enable the formation and growth of SMEs at a faster rate, they should be provided with good market opportunities, lower interest rates on finance, lesser burden on compliance procedures etc. Hence, there is a need to come up with better and flexible policies and regulations that not only support and encourage existing SMBs, but also make it easier for the upcoming entrepreneurs to establish new businesses.

Success of Small and medium businesses

Most of the SMBs are quicker in responding to the new opportunities than larger firms and hence they are innovative in pioneering and developing new markets. Of course, they struggle a lot during the initial phase of establishment, but once they are stabilized, these firms give more importance to human resource and innovation. Fastest growing SMEs, especially in knowledge based sectors, consider innovation as the most crucial aspect and emphasize more on translating strategies into action by hiring skilled workers and motivating them towards adopting newer technologies, promoting customer orientation by delivering tailored products, emphasizing on improving employee capabilities, focusing on new product research and development etc. Hence sustainability and success of SMEs means more new businesses contributing to country's economy, higher level of innovation in research and technology and greater number of employment opportunities in the society.

Smeph.net is a website about Small and Medium Entity Promotion in Hyderabad that contains exclusive articles, webinars, white papers & latest industrial updates to support and guide professional SMEs run their businesses successfully. We are thankful to professional SMEs like Marvist for helping in developing content to spread the awareness.

Vijay Kumar is experienced author; interested in writing blogs and articles on Smb methodologies and concepts.