Running a small business is by no means a task for the faint of heart in India. While there are several incentives and sops that the government doles out, it is difficult to remain competitive particularly in an increasingly global marketplace. At a recent small business forum, I met several of these intrepid folks running businesses in remote parts of the country and managing to keep one step ahead despite all odds. Why do I sound pessimistic? In India there is no way a small business owner can get easy (and inexpensive) access to capital. For most part, he goes to his regular banker and that is it. Small business owners remain unaware of a host of financing options available to them such as finance or operational lease, project financing, working capital options, etc. Given that many such businesses operate from remote areas, they do not get the “best” interest rates on debt as well.

Another person I know in Delhi runs a small business, manufacturing consumables for the textile industry and reasonably profitable. Now the owner was getting on in the years and wanted a good exit option. Turns out that he got a rather average valuation for his business given his rather limited direct network.

I feel that there is a strong case to have the India equivalent of the Private Company Index and Entrex in India. Such an exchange will benefit both small businesses as well as investors and other participants (consultants, researchers, general public). Besides it will help spur the next wave of development.