A number of new business support models are available to small businesses providing a one-stop shop of support and facilitating their growth, according to a new study by ACCA (Association of Chartered Certified Accountants).
India is home to the second largest ecosystem of start-ups in the world – with over 20,000 start-ups and growth rates of around 12 percent year-on-year. The country also boasts a number of innovative support programmes which has contributed to India’s flourishing SME community – including incubators, accelerators, as well as a number of co-working spaces.
ACCA’s new report Space to Grow examines how new and emerging business support models are being used to allow more SMEs (small medium-sized enterprise) to achieve rapid growth, but also support business recovery post Covid-19. The study highlights how we are moving away from traditional forms of business support to a more innovative infrastructure of support.
Some of the innovative mechanisms supporting scale-ups include:
- Incubators: support business creation and development. They are typically physical spaces, which provide additional services such as training and mentoring for entrepreneurs, access to networks, and sometimes specialist equipment or facilities such as laboratories. They can be non-profit institutions set up by Universities, Governments, agencies or donors, or commercial enterprises set up by private sector companies and investor groups.
- Accelerators: are focused on growth and often include assistance in developing the business plan, investor pitch deck, prototypes, and initial market testing. In contrast to incubators, accelerators more often base their business model on equity from the start-ups. Historically, accelerators have been highly focused on funding, although elements such as networking, mentoring and market access are increasingly seen as equally important.
ACCA’s head of SME Aleksandra Zaronina-Kirillova says: ‘Accountants and small and medium-sized accountancy practices (SMPs) have an important role within this space. Start-ups and growth businesses need sound financial management and data as they start and grow their businesses. SMPs can provide much more than mere compliance – they can become growth partners, and grow with their clients. This is particularly important in the post Covid-19 recovery of small businesses.’
One of the key case studies featured in the report, is the trade association NASSCOM, which showcases its ’10,000 Start-ups programme’, an umbrella name for a wide range of start-up , incubator, and acceleration programs. NASSCOM is the apex body of India’s $180bn IT and Business Process Management industry – an industry which makes an incredible contribution to the country’s GDP and provides the highest employment in the private sector.
Kritika Murugesan, the director of ‘10,000 Start-ups’ says: ‘Our initiative was a natural outgrowth of NASSCOM’s role in building the ecosystem with the support of the IT sector and state and national governments. Start-ups are well supported in the current network from all fronts.’
Head of ACCA in India, Md. Sajid Khan, says: ‘The start-up ecosystem in India is driving innovation and building a robust framework to overcome challenges posed by Covid-19. They are emerging as a natural engine of growth underpinned by adaptability and resilience. To support these start-ups, accountants need to play the role of a trusted adviser who can guide them through this challenge to develop a robust business which acts ethically and responsibly’