Small businesses are regarded as the foundation of the Indian economy because they have bolstered local markets, created millions of jobs, prioritized innovation, and, most importantly, helped to formalize the economy.  But when it comes to funding, market recognition, or access to government programs, small businesses typically face a disadvantage when competing with big brands.

To ease this challenge, the Indian Government came up with Udyam Registration to provide MSMEs with an identity and also provides several benefits.

We are going to discuss here, in this article, how Udyam registration helps small businesses compete with big brands.

Strength as an Identity of Government

Udyam registration means registering the firm with the MSME database of the Indian government.

This gives you an official identity and instills confidence among investors, banks, and customers.

While large companies build trust with their brand name, small businesses can prove themselves government-certified and legitimate with their Udyam certificate.

Example:

A small handmade jewelry unit registered at Udyam does business on equal footing with large brands on e-commerce platforms or on government portals because it has a government-registered identity.

Ease of Funding and Loans

The main challenge for small businesses is raising capital.

The large companies easily avail themselves of bank loans and investments, while the small enterprises are frequently rejected.

The following are the several financial benefits to MSMEs post-Udyam registration:

• Collateral-Free Loans

• Low-Interest Loans

• Government Subsidies and Support Schemes

This allows even small businesses to raise enough funds for production, marketing, and expansion, hence competing with bigger companies.

Access to Government Tenders and the GeM Platform

One of the major benefits of Udyam registration is access to government tenders and GeM.

The MSMEs registered on the GeM portal will get an opportunity to sell their products to government departments.

As compared to large firms, MSMEs registered under Udyam enjoy specific discounts and concessions:

• Exemption from tender fees

• Exemption from Earnest Money Deposit (EMD)

• Preference for MSME quotations

This way, small businesses increase sales and brand value by actively taking part in government projects.

Marketing and Brand Promotion Support

Large companies have huge budgets allocated to marketing, while smaller ones do not have that luxury.

However, under government schemes, MSMEs are supported for brand promotion and market development after Udyam registration.

They are provided with financial assistance from the government to participate in national and international trade fairs.

This allows small enterprises to display their products in bigger markets and also to create a brand image.

Technology Development and Training Assistance

Large firms are leading the way in the introduction of new technology to make production more effective.

The government also supports the Udyam-registered MSMEs with technology-upgrading schemes.

They receive:

• Subsidies for the promotion of machinery upgrading

• Training programs

• Special schemes for quality improvement

This can help small businesses work more efficiently and embrace advanced technology just like big companies.

Security of Timely Payment

Many small businesses go through delayed payments with big companies, which affects their cash flow.

However, under the MSME Development Act, 2006, every Udyam-registered enterprise is entitled to interest on delayed payments.

In case the big company defaults on making a timely payment, the MSME can legally sue the company and recover the amount with interest.

This provision provides financial security to small businesses.

Tax and Subsidy Benefits

MSMEs registered under Udyam get several benefits related to tax exemptions and subsidy schemes.

For example -

• Electricity bill discounts

• Relief in registration fees

• Special subsidies in the industrial sector

These benefits reduce small business expenses and allow them to keep prices competitive in selling their products.

Business Network and Opportunities Expansion

Udyam-registered MSMEs have opportunities to be linked with other industries, government agencies, and investors.

This network opens up new clients, collaborations, and business expansion.

Example:

Many MSME associations and online forums link only Udyam-registered businesses. Small businesses, through this, are capable of collaborating and reaching out to a bigger market.

Better Credit Rating and Trust

It will allow Udyam-registered enterprises to obtain MSME credit ratings at a subsidised cost.

This is indicative of their financial performance and reliability.

Businesses with good credit ratings can often expect greater trust from the banks, customers, and investors.

This opens up new avenues of investments and sales for small businesses.

Ability to Compete with big players on equal field 

Most importantly, it helps empower small businesses to compete on equal terms. This means that they are no longer confined to local markets but also have a national and global presence. They can also establish their presence globally. They receive legal protection, government schemes, technical assistance, and financial support and are thus strong enough to compete even with giant firms. 

You Can Apply for Update Udyam Certificate Through Udyam portal

Conclusion

Large companies may have the resources, capital, and brand power, but small businesses have flexibility, innovation, and local understanding. Udyam registration can facilitate a path on which such small businesses can realize their potential and stand in competition with bigger companies with the support of the government. In present times, if a small-scale industry is looking to enhance its brand, attract investment, or avail itself of government opportunities, then Udyam registration is the first and foremost step.