These are 3 reasons why SME's business is difficult to advance!

In Indonesia, many MSMEs or Micro, Small, and Medium Enterprises have emerged. There are MSMEs founded by people who have a passion for trading, some are trying their luck. Not a few SMEs are finally able to progress and increase. On the other hand, there are several reasons why MSME businesses are difficult to progress and lose competitiveness.

3 Mistakes That Most Often Make MSMEs Difficult To Progress

Several mistakes are the reason MSMEs cannot last long and develop their business:

Never Record Transactions

Due to the lack of knowledge related to bookkeeping, many MSMEs sell what they are. A bad habit that often occurs is never recording sales and purchases of raw materials that occur every day. The recording and bookkeeping of these transactions are very important and has several functions.

You can carefully examine the inflow and outflow of money when there is a complete transaction record. Not only for research, but the bookkeeping can also be used as a basis for evaluating how much loss or profit is obtained from the business undertaken in a certain period. MSMEs that do not register will not know the exact financial position of their business.

Combining Business Income With Personal Assets

Another source of problems that is the reason why SME businesses are difficult progress is that they are still accustomed to combining business money with personal money. Even though it looks trivial, if you don't separate where money is for business and where is personal money, then the money that should be used for capital turnover is vulnerable to being used for personal purposes.

As a result, you also don't know for sure how much profit you get, where the profit is used, or how much remaining debt or receivables exist. This also makes it difficult to know how much pure operational expenses are for running a business. If you don't know how much the operating expense budget will be, it will be difficult to manage and control the costs needed in the future.

Even if you take notes, it's still manual

In addition to SME businessmen who do not keep records, of course, there are also others who are active in recording transactions and recording business cash flows. Unfortunately, the recording is still done manually. Manual recording certainly has several weaknesses, one of which is incorrect recording and it takes a long time to compile an income statement or other financial statements.

So that the SME's business that is run can be more advanced optimally, use a practical financial recording application. You can monitor the remaining available stock, weekly and even monthly operating costs, as well as the profit you get easily. Not only that, as a business owner, you can also find out when the due date is valid and measurable.

With neat and orderly financial records, you can also apply for various funding to institutions and individuals to increase your business capital. With these financial reports, potential funders can assess and evaluate the capabilities and potential of the SME business that you are currently living in. Not a few MSMEs have passed funding because of good financial reports.

Well, those are 3 reasons why SME business is difficult to progress and what can you do to develop your business. Never give up on improving all aspects of your current business. No business will progress without going through various improvements to a better direction. Now try to evaluate your MSME business, is it free from the 3 reasons for the SME's business that are difficult to progress above?

Reference:

https://kumparan.com/ryanghiff23/kenapa-bisnis-usaha-mikro-kecil-dan-menengah-susah-maju-1xgKg44DkpT/full

https://www.tagar.id/mengapa-bisnis-umkm-susah-maju