Shrishna on Risks faced by SMEs
Arjuna once requested Shrikrishna to guide his friend, Satyavan who was into SMEs sector. He was a small manufacturer. Shrikishna was happy to help him. Satyavan called up Shrikrishna, greeted him and said, "I have only question, what are the risks which we face as SMEs." Shrikrishna replied, "Answer cannot be given on a single phone call but he will try to list various risks faced by SMEs generally. Shrikrishna said some of the basic risks are disruptive innovation happening in technology front and not keeping up with the modern technology, not able to accept the changes and consequently being absolute. Second Risk is mismanagement of funds, liquidity issues, wrong investments. Third risk is attracting and retaining good talent. Non-compliance with local laws can result into closure of businesses too."
Satyvan said why Shrikrishna is of the opinion that these are biggest risks to which Shrikrishna said, these are the risks which can not be covered with hedging of insurance and SMEs will have to work harder on these risks over years. These things are fundamental to any businesses. Risks like fire or foreign exchange can be covered with but these risks cannot be covered.
Satyavan asked how to take care of these risks, Shriukrishna said, "These can be taken care of by having strong values, systems and discipline. These are the things which create goodwill for your business. These are the things which help you to run long term. Otrher Risks can be managed but these risks if not handled properly can put you out of business"
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