SMBXL: Making online presence a reality for micro & small enterprises

As of May 2023, the Udyam Registration portal has registered 15,548,986 micro-enterprises, 546,471 small enterprises, and 52,078 medium-sized enterprises. These numbers clearly indicate that micro and small enterprises are significant contributors to the socio-economic development, entrepreneurship, and GDP of the country. The increasing adoption of digital technology is further enhancing the growth of these sectors. In 2022, 8.73 lakh micro and small enterprises successfully sold their products on the Government e-Marketplace.

MSMEs have also rapidly adopted digital payments, with the total digital transactions amounting to Rs 2,050 trillion. To assist micro and small enterprises in their digital transformation journey, numerous startups are offering software-as-a-service solutions. One such startup, based in Hyderabad, is SMBXL, which provides a software platform designed to meet the basic requirements, reach, and revenue goals of micro and small enterprises looking to establish an online presence.

In an interview with Bizz Buzz, Preeti Ubale, Co-Founder and COO of SMBXL Pvt Ltd, shares that their user-friendly platform offers three key products: Market Central for attracting business, Business Central for managing operations, and Logistics Central for order fulfillment

Why does SMBXL focus exclusively on micro and small enterprises?

SMBXL stands for Small and Micro Business eXceL, where SMB represents small and micro businesses, and XL signifies our commitment to helping them excel in their business endeavors. These small and micro businesses play a substantial role in the country's economy. They are often self-reliant, driven by aspirations, and known for their hard work. These entrepreneurs aspire to take their businesses to the next level. As technology experts, we aim to provide them with the necessary technology to enhance their efficiency and facilitate faster growth.

Elaborate on the three offerings available on SMBXL…

To grow the business of micro and small enterprises, we thought of getting them more suppliers, customers, and business partners. Hence, we came up with our first product, Market Central, which helps them bring new business. They can also reach out to new customers, partner with others and scale their operations. Our second product, Business Central is an ERP (enterprise resource planning) designed platform to cater to the changing needs of Indian businesses. While we were offering these, we had a lot of businesses asking us to fill the gap by providing a solution for delivery, so the idea of Logistics Central came in. In a way, these three solutions complete the ecosystem that businesses look forward to. On Market Central, if a business gets discovered, somebody can place an order or ask for a quotation, if the order is placed the payment can be made immediately. We facilitate their payment QR codes on our platform. There is a billing solution that is included, but we let them choose to make their transactions online or offline. When these enterprises are comfortable then we up sell them into Business Central, where there is billing, accounting, inventory and the whole business gets managed.

How has SMBXL brought an impact in the business of these enterprises?

We started off in the end of December 2018, and we continuously adapt to the changing requirements of these businesses. Till date, we have served nearly 55,000 businesses. Holistically, our offerings help businesses reach out and earn revenues. Our clients have earned up to Rs 500 crore in revenue in the last two years. Post-Covid, we witnessed a surge in adaption of our platform and these enterprises are much more active on SMBXL, as businesses have realised that being online is a necessity.

As you mentioned Covid, has the expectation of SMEs from going online changed post pandemic?

Covid has not been kind to SMBs, many have lost businesses and revenues as the demand in the local market, raw materials, and logistics, among others was affected. Many businesses tried to stay afloat by digging into their savings, but who could not manage had to shutdown. During this period they understood the need to adapt technology, so that even on the move they can have control on their business. Before pandemic it was push product and now it is pull product. We have sellers from Jammu and Kashmir, they know how to manage and interact with customers and startups like us. On the other hand, if SMBs had a prior bad experience they shut themselves off from going online. We firstly educate and make them aware about what is secure and what is not, while being online. Most of our businesses come from Delhi, Mumbai and Tamil Nadu and rest of them follow suit. We have reached markets such as Sangli in Maharashtra to Shimoga in Karnataka. Most of our SMBs across India are from Tier-2 and 3 cities. Our platform is available in eight regional languages for the convenience of SMBs.

Tell us about SMBXL’s presence in both the Telugu States…

As our team is based out of Hyderabad we are continuously adding clients from these markets. We had partnered with Numaish exhibition last year and this year too they invited us. We went on to design an app for the expo where the visitors could find the way to the stall they are looking for by scanning our QR code, so the whole topography was mapped by us and, that is how our collaboration with Numaish has extended even more. We covered nearly 1,000 businesses here. Right now we have a virtual mela going on, wherein a visitor can click on the tab and walk through to find stalls, then click on that stall and make a purchase. Since festive season is here, we started off with dry fruits. We have got about 25 per cent of the base from AP and Telangana for this virtual exhibition.

What are your plans charted out for the coming years?

In the next 12 months we are aspiring to reach a total of 1.25 lakh SMBs from the current 55,000. We are expecting existing businesses to bring in new clients through referrals. We have a networking option where businesses can connect with other businesses online. We are also coming up with an advanced app version in the next one month which can take up transactions and others, right now it is a basic version. Currently, we are a bootstrapped startup, up to the tune of around Rs 6 crore. Our revenue model is based on subscription, either monthly or annual. We charge Rs 799 per month for Market Central, for Business Central it is Rs 18,000 per annum. We are a team of 84 employees. We are hiring around 10 freshers to work on software. Funds wise its fine, yes we are looking to raise investment, but for the expertise and networking. Our current focus market for this year is India. We might look at reaching out to SMBs in the East, like Philippines and other smaller countries that are into manufacturing and making products for the western world, as the demand for technology is high in those sectors.

While branded retail stores are onboarding well integrated SaaS solutions, are micro enterprises yet in the phase of upgrading?

As entrepreneurs the challenge we faced while entering the market is convincing them to use technology. As we offer cloud-based solution, businesses have the apprehension that once they are online anybody out there can gain access to their data. Now, businesses are better educated. Also, earlier brick and motor businesses were comfortable with the revenues they were generating. Right now, it is about necessity as their customers have lot of choices. Online is also an additional channel where they can make more revenues. Our offerings are omni-channel where both their offline and online business can come onto one platform. The business owners who are above 50 years understand the importance of being online, so they refer us to their younger generation to take the onboarding process forward.

What are the other challenges faced by micro enterprises that needs to be addressed?

It is a changing economy. Now, taxes are to paid online, so one person cannot say he will go to the tax office and pay it over there. Somebody who is offline will have to bring in a tax consultant, which means things are continuously evolving. This makes skill development a necessity to grow in accordance with the changes in the market economy. Secondly, they always have challenges with competition and furthermore in the current market scenario where entrepreneurship is being encouraged, there are more people coming in and participating and starting new business. As they face competition, they would want to understand, of how and what to be done to deal with it. Third, a simplified solution for what they are looking at. Business is not as simple as it used to be. Earlier generations used to remember all the 10-20 names of their customers and suppliers, which is not the case now, it is very dynamic; enterprises would want to know how they can handle with these dynamics.

Is an affordable price point necessary to onboard micro-enterprises into online business?

SMBs, whether they are adopting our service or that of another startup, are willing to pay reasonable fees. What truly matters to them is the value they receive in return for their investment. Given that we focus on serving a large number of businesses, we have structured our subscription fees accordingly. Our goal is to ensure that even entrepreneurs starting a new business can comfortably afford our solutions. One of our key advantages lies in our user-friendly interface, and we take pride in our exceptional customer support. We don't just onboard businesses and leave them to fend for themselves; our support team is consistently active, providing assistance without distinction between pre-sale and post-sale inquiries.

How can SMB’s predict profitability and sustainability of their business which will help them scale up and grow?

We have known businesses who ordered for inventory despite of having stocks in their godown. That is because they did not track what has been ordered and what existing stock is available. Input and output or what they consumed or sold was not tracked. This is a very common problem that we get to see. We help businesses take data driven decisions. There is a dashboard on our platform which will give these businesses a sales report, so when they have these figures with them they know how to use this data. When its manual there is a scope for error but with the use of technology the numbers get populated in front of them and they know how to take it forward.