47% Of Indian SMEs, Startups Will Run Out Of Cash Within 1 Month Including Many Out Of Funds Already: Survey

47% Of Indian SMEs, Startups Will Run Out Of Cash Within 1 Month Including Many Out Of Funds Already: Survey

61% of responding startups are looking to scale down within the next six months, while 13% are looking at a complete shutdown

With India under an ongoing lockdown to contain the spread of COVID-19, Indian small- and medium-sized enterprises (SMEs), including startups, are struggling to stay afloat. With restrictions on movement and the sale of non-essentials, many startups’ revenue flows have either dwindled or dried up completely.

According to a survey conducted in the last week of March by community and social media platform LocalCircles, 20% of startups reported that their funds would last for less than a month, while 27% of startups and SMEs have already run out of cash.

The survey received over 13,970 responses from startups and SMEs located in over 90 districts in India. Only 6% of respondents said that they had a runway of over six months, while 23% reported that their working capital will last between one and three months.

Indian SMEs and startups may be looking at a bleak future:

  • 61% of respondents are looking to scale down within the next six months
  • 13% are looking at a complete shutdown
  • 7% of respondents expect to sell their business within the next six months
  • Only 13% of respondents expect growth

According to LocalCircle’s report, SMEs and startups in India have reached out to the government for assistance to tide them over the current crisis.

The call for help included a demand for reimbursement of 50% of startup employee salaries for one month, or a one-time INR 2,000,000 (around US$26,300) grant for government-registered startups.

Even tech companies who are experiencing a spike in the usage of their platforms have been unable to monetize the increased demand, and some entrepreneurs believe that the lockdown will push their startups back by one to two years, according to LocalCircle’s report.

Amid the COVID-19 crisis, Amitabh Kant, the CEO of Niti Aayog, the Government of India’s policy think-tank, recently announced that the Finance Ministry is taking several measures to help the SME sector, and a relief package is in the works.

Food ordering and delivery platforms Swiggy and Zomato, who have both raised funding rounds recently, have launched grocery delivery services to cope with their loss of revenue amid the crisis, while startups like Udaan, Oyo, BharatPe, Acko, Fab Hotels, Droom, UpGrad, Meesho, Curefit, and Zilingo, have resorted to massive lay-offs and pay-cuts despite the Labour Ministry’s advisory against it.

Header Image by Andrew Khoroshavin from Pixabay

SHARE THIS STORY

Share on facebook
Share on twitter
Share on linkedin
Share on email

RELATED POSTS

How Can Entrepreneurs Overcome Loneliness?

How Can Entrepreneurs Overcome Loneliness?

Starting your own business is a project that will take over most of your life. You are straying away from the typical 9-5 jobs that your friends and family may have. The sheer effort you have to make to get a business up and running will leave you feeling lonely. While it might seem almost expected to feel lonely during your startup journey, loneliness is a slippery slope to several health conditions.

8 Techniques to Get Readers Rolling Right into Your Content

8 Techniques to Get Readers Rolling Right into Your Content

We’ve all been there. We’ve spent hours crafting the perfect blog post, article or white paper, but no one is reading it. Why? It could be for a million reasons, but often it’s because we’re not doing enough to get people to come to our content. In this article, we’ll learn about the eight techniques that will help you draw in readers and get your content read!

Amazon vs Flipkart Who Will Win Festival Sale War in India

Amazon vs. Flipkart: Who Will Win the Big Festival Sale War in India?

Amazon India and Flipkart, the two biggest ecommerce giants in India, have always been in a neck-to-neck competition for supremacy in the country. There is no better occasion to showcase their strength and take advantage of people’s shopping mood than during the Indian festive season, which begins in late September featuring various festivals, like Durga Pooja, Dussehra and Diwali.

Reviewing Top AI Boyfriends on Google Play Store

Anima vs. Replika: Reviewing Top AI Boyfriends on Google Play Store

Finding your perfect match can be a long and tedious process. You can go on date after date and still have a long way to go before you find your soulmate. In the meantime, you can curb your loneliness by speaking to an artificial intelligence (AI) chatbot.There are dozens of AI chatbots on the market today that give you the experience of having someone to vent your issues to and discuss your daily lives with.

Shrinkflation

What Is “Shrinkflation” and Why Opting For It Isn’t Companies’ Only Choice

You might have noticed grocery prices are soaring, or your usual go-to pack of chips is shrinking in size—all thanks to massive inflation. As of August 2022, the U.S. consumer price index (CPI), which measures the change in consumer prices for a specific set of goods over a period, has increased by 8.3% (year-on-year). Although it has gone down slightly from 8.6% in May, the highest it has ever been since 1981, it remains high and worrying.