84 per cent of the SMEs surveyed for the study tick financial discipline as the key determinant of their success.
Early adoption of financial discipline is critical for profitable growth among small and medium enterprises (SMEs), reveals a study by American Express and Jet Airways conducted in association with CRISIL.
A whopping 84 per cent of the SMEs surveyed for the study, titled ‘Growing Significance of Financial Discipline among SMEs’, tick financial discipline as the key determinant of their success. 47 per cent see working capital management as the most important component of financial discipline while 41 per cent choose fixed-capital management.
Two-thirds of the respondents see economic growth rebounding, albeit at a moderate pace. The median growth expectation for India is at 7.9 per cent, led by an expected recovery in global markets and some improvement in domestic demand. 69 per cent of respondents expect their turnover to expand at 7.5 per cent over the next 1-2 years, with large and established SMEs anticipating double-digit growth in the same period.
As SMEs chart out growth plans spurred by improved economic sentiment, 80 per cent acknowledge that business travel and lodging, which account for 10-15 per cent of their overall spend, is highly important for the growth and development of the business. A third of the respondents see a 5-10 per cent increase in this area this fiscal.
“SMEs in India are in an excellent position for expansion and, as indicated in the study, see financial discipline as an important factor to drive their growth” said, Saru Kaushal, Country Business Head (Global Corporate Payments), American Express. “And, travel and related expenses are an important cost category and managing expenses on this front is as important as growing revenue. Our expense management solutions are central to effectively control and monitor business travel expenses. They also give businesses flexibility around when to make payments, which enable companies to manage their working capital and cash flows for investment in business growth.”
Manish Dureja, MD, JetPrivilege, said, "At JetPrivilege, we have always believed that the Small and Medium Enterprises will be fuelling the growth of the Indian economy. The report has clearly exemplified that while SMEs are optimistic and confident in managing their businesses, they have a need to manage their travel and entertainment overheads to grow their businesses exponentially. Jet Airways and JetPrivilege have embarked upon a journey to specifically address the business needs of the small and medium enterprises segment by introducing a Co-branded Corporate Card in association with American Express under the Business Rewards+ program powered by JetPrivilege. The program gives entrepreneurs greater control over their travel expenses and over the rewards they receive in lieu of their expenses, which ultimately benefit their business immensely."
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