SMEs' Strategy to Circumvent Limited Capital

Domestic Small and Medium Enterprises (SMEs) face an array of challenges. They do not only have to increase sales profit, but they also have to work hard to fulfill operational needs.

This is all despite SMEs contributing significantly to Indonesia's economy. The 2017 data from Statistics Indonesia showed that SMEs' contribution to Gross Domestic Product (GDP) reached 61.41%.

Moreover, SME growth has an important role in opening new job opportunities. In the same year, SMEs absorbed almost 97% of the country's total workforce.

Considering the numbers, it is no exaggeration to say that SMEs are an important element in the growth of national economy. Therefore, continuing business improvement needs to be done by SME players, especially in order to circumvent operational needs such as vehicles or computers.

Furthermore, operating cost for SMEs is one of the fuel to move the wheel of SME business. However, in practice, many SME players have to deal with limited capital.

To circumvent this issue, there are actually several ways for business playersto fulfill operational needs without having to spend too much capital. As a matter of fact, these ways can reduce spending.

One of the easy and efficient strategies to fulfill the needs for vehicles and computers is through auctions. SMEs can choose vehicles and computers that are in good conditions but still within budget.

This strategy certainly saves more money than to buy new vehicles and computers. Moreover, this kind of assets will undergo depreciation and run out of its useful life.

If SMEs buy assets in an auction house, they can choose which ones are the most suitable according to their needs and budget. Generally, auction house provides many choices of vehicles or gadgets, of various brands and in various conditions; customers only have to choose which ones they need.

SME players can also see and even check the conditions of the goods during open house, before finally deciding to participate in the auctions. Furthermore, goods from the auctions can be bought in units or in bulk, like in IBID-Balai Lelang Serasi.

This subsidiary of PT Serasi Autoraya (SERA) under Astra offers services of buying and selling assets such as vehicles (cars and motorcycles), heavy machinery, and gadgets (computers, laptops, and smartphones) through auctions.

Moreover, IBID offers transparency in assessing the auction lots. For car auctions, IBID uses special technology to assess car condition transparently, accurately, and comprehensively. 

The scoring itself is classified from A to E. Score A and B mean that the car only needs minor repairs. Therefore, SME players can choose cars that need minor repairs.

Aside from accurate assessment, IBID also has clear regulations. Those who are interested in car auction only need to register as auction participants. With Rp5 million, they can get an Auction Participant Number (NPL) to bid for one car. 

This money will be returned 100% if the participant doesn't win the auction. However, if they win the auction, they only need to pay the remaining amount. For example, the price of the car is Rp100 million, then buyers only need to pay Rp95 million.

Through auction, it is hoped that SME players can have a chance to fulfill their operational needs without having to use up their capital. Indonesian SMEs can then develop more, boosting national economy and increase job opportunities.