India's small businesses likely to be strong creators of new jobs this year

83% of Indian small businesses expecting to increase employee numbers, ranking first among all markets. 62% of respondent forecast their small business will grow this year. The survey, conducted from November to December 2021, is designed to understand local business conditions, challenges and confidence

After one and half years of challenging times, here's something that Indian small businesses can cheer about. Sixty-two per cent of Indian small businesses reported growing last year, with 46 per cent experiencing very strong growth, if a recent survey (released on Saturday) done by CPA Australia, one of the largest professional accounting bodies in the world, with more than 170,000 members in over 100 countries and regions, including more than 2,000 members in South Asia, is to be believed. That's not all. As high as 77 per cent of respondents said that they had hired more employees, outperforming all other markets.

|And there are more encouraging and positive forecasts as well. India's small businesses are likely to be strong creators of new jobs this year, with 83 per cent expecting to increase employee numbers, ranking first among all markets. Sixty-eight per cent of respondent forecast their small business will grow this year. The survey, conducted from November to December 2021, is designed to understand local business conditions, challenges and confidence.

"The survey results confirm that Indian small businesses are very ambitious. Despite the pandemic, most undertook actions such as making substantial changes to the product or service and made investments associated with high growth businesses. India's small businesses take the crown as the most innovative in the region. Ninety-four per cent told us they will or may introduce a new product, process or service this year, surpassing all other markets surveyed for the second year in a row. A strong and competitive local economy, growing access to skilled workers and government policies such as the recently signed India-UK Global Innovation Partnership is anticipated to trigger a golden era of innovation for the sector," said Leslie Leow, General Manager – Emerging Markets, CPA Australia.

What is more encouraging is that reflecting their strong innovative culture, Indian small businesses are investing in technology with a very high success rate. Of local businesses that invested in technology last year, 80 per cent reported that such investment had already improved their profitability, well above the survey average of 54 per cent. To support their innovations, India's small businesses were the most likely to access external finance for business growth last year, and are the second most likely to expect accessing finance for growth this year. Financing this growth shouldn't be difficult with 69 per cent expecting "easy" or "very easy" access external finance this year, the highest result of the markets surveyed.

India's small businesses are also one of the leaders in selling online, with 83 per cent generating more than 10 per cent of their revenue through that channel. Related to that, they are also one of the leaders in receiving payment through new payment technologies such as PayTM and PhonePe.

CPA Australia analysts did not stop at surveying 525 small business owners from India, but also came up with some suggestions that would help them move to the next level, which included leveraging government initiatives to invest in technologies and to keep innovating, seeking professional advice to adapt one's business strategy to a high growth tempo, focusing on cybersecurity and taking on debt only where calculations show the expected return on investment exceeds the cost of new loans.