Phases of MSMEs deconstructed...

Technology will be the main fulcrum of any business in the future. One basic lesson for businesses that has remained constant over centuries is its ability to adapt, react and respond, all at the proper time as dictated by the business environment. Here is an article summarising the stages of setting up an enterprise briefly.

- Raju Varghese

Business longevity

What is common to Otis Elevators, Alembic Pharmaceuticals, Shalimar Paints from India and companies like Kongō Gumi of Japan or Stiftskeller St. Peter of Austria?

Their years of existence.

While Kongō Gumi has had an existence of 1443 years and Stiftskeller St. Peter has had an existence of 1218 years, these Indian companies have had an existence of only 100 years, breaking records with their sustenance in the market. The ‘third generation rule’ seems to suggest that businesses do not survive beyond the third generation, a debatable theory that conforms to a famous Brazilian saying, “Rich Father, Noble Son, Poor Grandson”.

Challenges to MSMEs: The Indian Context

How does one ensure MSME longevity?

To understand this, it is necessary to note that MSME formation goes through three phases, namely Conceptualisation, Implementation and Establishment.