The Council of EU Chambers of Commerce in India organized a webinar on “Finance for Entrepreneurs/ SME Owners” on 15th December 2020.
Mr. Narayanan Sadanandan, Chairman of the Banking & Financial Sector of EU Chamber and MD & CEO, SBI Pension Funds Pvt. Ltd. chaired the session. The eminent speakers were Mr. Sanjay Athalye and Mr. Rajendra Joshi from Leap2Excel. The webinar was well participated.
Mr. Narayanan Sadanandan, welcomed all the participants and very briefly introduced the speakers. He talked about the Chamber’s activities and how constantly promoting trade and business between EU and India. Talking about the scope of SMEs, he informed there is a about the gap of 20 trillion or 20 lakh crores which is done by borrowing from friends, money lenders and this gap of 20 lakh crores is trying to be met by formal sector. He said 35% of country’s contribution is coming from MSMEs and how MSME is the seed for most of the companies as most of the big corporates have grown out of MSMEs.
Mr. Athalye explained key challenges faced by MSME’s such as managing working capital cycle, over dependence on few customers as most of the MSME’s 70% to 80% of revenue usually comes from few clients, demand inconsistency and how to handle production, margin pressure from competitors, attracting talent and retaining them to name a few.
Mr. Joshi focused about the importance of source of cost. He spoke of the five forces that are always operational on the value chain of any business such as buying power, supplier power, substitute availability, new entrance and competition intensity, which are mainly guided by government policy.
Mr. Joshi gave the mantra of ‘Analyse and Prosper’, which encompass two elements that is profit management and balance sheet management.
Mr. Athalye explained how to make your balance sheet stronger, how companies can grow with equity capital or with a combination of debt and equity (Debt to Equity Ratio), working capital management, capital expenditure management and liquidity management by means of treasury policy and funds management. He further stated that having lesser assets is better as opposed to traditional school of thoughts. He talked finance decisions which entrepreneur has to take such as degree of leverage, interest burden on firm etc. and how those are crucial for cash flow management for which liquidity is needed. He emphasized on the importance of knowing value of business and studying parameters of profitability, capital efficiency, growth, cost of capital.
Dr Renu Shome formally proposed a vote of thanks and stated important role played by the Chambers especially during the tiring times of pandemic.