Marketing for Finance: SME can not ignore the increasing interface between finance and marketing in business

Gone were the days when a SME can start and grow with one's own limited savings. Today, in fact it is more difficult to ask for loan, fund or any kind of financial help from family members and friends. Money like never before in India is becoming the most valuable thing in life and business.

From the day an idea is conceived in the mind of young entrepreneur, the next important thing for him is to have monetarily support/backup required to take it to the next step. One needs to invest into tools, technology and travel from day one to pursue idea further. Young graduates, unless they hail from upper middle class families or are the next generation of entrepreneurs, finds a challenge to move further without adequate finance. On one side, there is a good five figure job awaiting him with perks and other personal benefits, and on the other side, entrepreneur has to invest in money and manage his own livelihood and his enterprise. To nurture dream, in real life, money/finance is must.

Race for Finance

In countries like US, there are several angel funders and a great reservoir of fund access from venture capitalists. In India, it is rare and not so common though India is a land of entrepreneurs. Though lot of talks go around from government to financial institutions about helping and encouraging entrepreneurs, but the fact is there is no risk fund available in reality. The first approach in this case, which an entrepreneur takes is to go to his local bank branch. He gets the form that asks for all information related to security and repayment. Loan up to Rs.10L is made available but collateral required is critical. What asset a young entrepreneur in middle class will have in his mid twenties? He needs guarantors, and unless parents, it is extremely difficult to find one. His race for finance begins with his idea.

SME having a small gala in industrial estate with a business in manufacturing and having annual turnover of few million rupees when wish to expand beyond local market and select few customers to start export of products – he will always find shortage of finance. It is extremely difficult to take out a part of money from rolling business payment cycle and invest into business of marketing, branding and cross border opportunities. Marketing needs liquid money. Marketing is an investment, but SME owners still believes it as an expense. They have started understanding value of brand but, are not keen to invest for it. Even financial institutions incl., banks and even SME banking division of PSU banks escapes for financing for marketing.

Finance First

Catch 22 situation – SME owners say we do not have money for marketing. Unless, finance is available first, we cannot think of large scale marketing and branding. This has created a great need of marketing for finance, and many of SME owners and promoters have started thinking on this seriously.

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