Thursday, July 17, 2008

Is Small Beautiful?

Sometimes I wonder, is small really beautiful? In my everyday interactions with individuals, companies, government departments etc, I increasingly realize that the system around us does not see value in supporting small enterprises.

Recently, Kern formed a joint-venture with HumanCentric, a US-based user research and product design company. We wanted to send a press release to the national dailies and magazines to announce this. Alas! Not a single PR agency (big or small) really came forward to take this up. They kept pushing us "additional services" instead. "Why don't you hold a press conference?""Why don't you commission a story?""Why don't you engage us for the year?" And, all this without making any attempts to either understand our needs or our business.

Similarly, we have been hunting for a decent caterer to supply office lunch. Same sob story! Nobody wants to supply food for 10-15 people. "Sorry, not viable for us!" Well, what about being a little more enterprising and figuring out the needs in other offices in the same complex? "No Sir! Rule says, we provide for minimum 15 people."

The story of how banks trouble SMEs is legendary! "Sorry ma'am no salary accounts for less than 25..." "No relationship officer for small companies." "Why don't you send your person to get a DD done?" But you had promised us that you would provide check pickup and draft creation facilities? "Sorry Sir, no person here right now" and so on. But when it comes to pushing unwanted services - yes they are ever so ready to push their credit cards and insurances to our people. And, all the while making tall claims about enhanced customer experience.

Another sad story is our government's policies and social infrastructure. Land that is available for lease to companies is not meant for SME mortals. They are 100s of acres of land that only the Wipros and Infys of the world can afford. Every time there is a power failure for 3 odd hours, SMEs lose business. Although we have an UPS that provides 8-hr power backup, we still run out of stem during marathon power cuts. Buying a generator for a seasonal power crisis is like domesticating an elephant for the once a year elephant festival!

Ah, not to forget the apathy of cell phone and Internet service providers and hardware providers - read Ripul's blog - toward SMEs.

So, is there any truth in the belief that providing service to an SME is wasting too much effort for too little?

Let me give some reasons why the belief could be faulty:

1) No small business stays "small". Companies begin small but they never remain small. So there is smartness in growing with these companies as they grow.

- When we started in 2004, it hurt to pay Rs 600 per month towards Internet charges, and today we gladly pay Rs 10,000.

- In 2004, we struggled hard to find an affordable 600 sft space. Today, we are in a 1350 sft space and already looking out for a bigger space.

2) No service goes waste. Most SMEs trust word-of-mouth references. Be it the need for a networking guy, a food supplier, a courier vendor, a trainer, an editor, a hardware provider or a financial adviser. Stories of bad services spread very fast. Alternatively, stories of good services are lapped up even faster! We had a great architect whom we recommend to one and all. We have a great Chartered Accountant who has been with us from our pre-formation days. Every time, we need advice, bounce ideas, or support, we know whom to call! It's simple logic for all. "When our clients grow, we grow."

3) Every penny that comes in adds to your revenue end of the year. In 2004, Rs 2000 for a project generated as much excitement as Rs 2,00,000 does today! When we started our business, we adopted a "foot in the door" policy. We did not worry whether the work brought in small revenue or big. We worried whether our work would give us an entry through the door for more work to follow!

So, when banks, caterers, vendors, service providers create a fuss about catering to small businesses, I feel sad at their lack of foresight!


ripul said...

ICICI bank will definitely top the small business hate list in India. They have been unresponsive, uncooperative, unorganized, irresponsible, and downright a huge hurdle for small businesses.

Yesterday, HSBC bank wanted our current account/foreign currency/fixed deposit business. However, they refused to have less than 50 numbers for salary account -- we asked them to go.

Recently we also had a horrifying experience with Iomega India service to small companies.

Each day is a new experience for small businesses in India.

Reva Garde said...

Hey, didn't know you and Ripul had blogs!
I am going to email this post to my sis who works for ICICI bank {Rips, don't hate me now :)}.
One suggestion for office lunch is to catch hold of some enterprising stay-at-home type who can cook from her/ his own kitchen. Why bother with big-time caterers who will anyway serve mass-produced unhealthy gunk when you can have great quality, wholesome stuff?

Reva Garde said...
This comment has been removed by the author.
Reva Garde said...

Very typically, I have focussed on the tiny 'food' part of the post :).

ripul said...

Revs, would love you always - no matter what :D

Satyajit said...

all these companies should learn from the tobacco lobby. tobacco's motto is "catch em young". tap them when they are small so they remember you when they are big...
ICICI bank are a bunch of incompetent bastards who could not work efficiently if their lives depended on it.