Turnover Specialist can help SMEs grow: Viren Malhotra

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Saurabh Gupta | 25 Mar, 2014
All small and medium enterprises (SMEs) that want to grow, require the Promoter to let go and effectively delegate to his/ her managers - this usually is very difficult. And a turnover specialist like a mentor can help cultivate such qualities, a Turnover Specialist, Viren Malhotra told SME Times in an exclusive interview.

Excerpts of the interview..

Sir, you are a Turnover Specialist. What exactly a Turnover Specialist do?
Viren Malhotra: My key skills lie in helping SMEs grow and scale up. Having advised large international companies while working with the world's largest consulting firms, I have had the opportunity to understand what some of the issues are that need to be effectively tackled to achieve sustainable growth. I apply these learning's for the benefit of my SME clients and assist in their growth.

How can a Turnover Specialist help a small and medium enterprise to grow?
Viren Malhotra: To grow beyond a certain scale, SMEs require a new way of thinking as well as a different set of skills. Depending upon the sector they are in, different SMEs require different solutions for growth - for example, a brand led business would require strong public profiling backed up by an effective sales force, a company that undertakes infra projects would need to effectively manage contracting risk, contain costs and manage projects efficiently, a typical manufacturing company would need to ensure manufacturing efficiency while growing. Above all - all SMEs to grow, require the Promoter to let go and effectively delegate to his/her managers - this usually is very difficult. And a turnover specialist like a mentor can help cultivate such qualities.

Credit is always an issue for SMEs. How much this consultancy service cost?
Viren Malhotra: I am passionate about working with young and small companies and I am aware of the cash flow issues that confront most SMEs. My endeavour therefore is to provide world class advise/service at terms that are workable for SMEs. Service offerings are tailored to meet individual circumstances and requirements.

SMEs do not take branding too seriously. How much brand promotion is important for any company?
Viren Malhotra: Branding is extremely critical in certain sectors while not being so important in some others. This issue needs to be tackled taking into account business needs- for example, consumer oriented sectors usually need greater branding thrust.

Small businesses usually suffer from lack of funds. What strategy should they follow in this situation?
Viren Malhotra: In general SMEs need to contain risk better, manage working capital cycle efficiently and keep costs down. I have seen companies achieve 4-5% higher profitability just by managing their manufacturing/execution efficiency better.

Being a specialist what are the basic fundamentals that an entrepreneur must keep in his mind?
Viren Malhotra: Get the right employees, delegate effectively, incentivise employees and keep their morale high.

The rate of shutdown of any small business is very high in our country. While analyzing this what kind of reason you have found in most of such SMEs?
Viren Malhotra: Lack of staying power to ride out the tough economic cycle is the biggest reason for SME shutdown. Most SMEs have limited promoter equity and therefore are vulnerable to business shocks. Larger companies usually have a much greater ability to withstand economic swings and shocks. Currently we are passing through a difficult economic phase. Some small companies are bound to shut down in this Phase. Others will come out stronger and capitalise upon the economic rebound.

What are the issues that you think should be addressed by the government for drop down the closer rate of SMEs?
Viren Malhotra: More than the government, it is the banks that need to be patient with their SME clients. Willful defaulters amongst the SMEs must surely be dealt with sternly but companies that are facing tough times due to genuine economic difficulty must be dealt with gently.