Focusing on these areas would help businesses stay resilient and build trust with employees, customers and partners, says Sajja Praveen Chowdary, Head, Policybazaar for Business. “The year 2024 taught us that preparation isn’t optional but essential. Cybersecurity is one area that’s become a priority, with businesses needing not just stronger systems but also support like cyber insurance to bounce back from incidents quickly. Financial stability is another priority; in fact, 40% of Indian MSMEs experience delays in payments, which can destabilise operations. Trade credit insurance helps ease these disruptions,” he explains.
On the employee front, providing health and life coverage not only safeguards staff but builds loyalty, which is a powerful retention tool, notes Chowdary.
MSMEs should start strengthening these areas of operations as they account for nearly 46% of exports and play an important role in making India a $5 trillion economy by 2026-27. So they should not leave themselves unprotected.
Risk isn’t something MSMEs can afford to address later, says Kulin Shah Co-Founder & COO, Onsurity. The year 2024 taught us that. The scale and intensity of risks have increased dramatically, with 46% of cyber breaches targeting businesses with fewer than 1,000 employees, he points out. “If you are an MSME, you are a prime target simply because hackers expect your tech infrastructure to be vulnerable and easy to penetrate. Basic steps like setting up multi-factor authentication (MFA) are non-negotiable — it’s like putting a lock on your door. But don’t stop there. Train your employees to spot phishing scams because one innocent click can bring down your entire operation,” says Shah.
Similarly, Shah says that the right investments in financial instruments and tools can give you real-time insights to stay ahead of disruptions. On employee management, Shah notes that MSMEs need to shift from viewing employee health as a “nice-to-have” to a business imperative. “Wellness programmes don’t have to break the bank. Even small steps, like offering mental health support or flexible schedules, can drive retention and engagement. A happy, healthy team is your best defence against risk.” Role of tech and innovation
Chowdary says that tech gives MSMEs powerful tools to manage risk proactively. “For example, automated systems can detect cash flow issues early, and AI-driven cybersecurity solutions help catch threats before they escalate — an investment worth considering, as data breaches cost small businesses an average of $108,000, according to the Hiscox Cyber Readiness Report,” adds Chowdary.
In supply chains, digital tracking allows SMEs to anticipate delays and adjust quickly, minimising costly disruptions, he notes.
Both industry stakeholders say that technology isn’t a luxury for SMEs — it’s their survival toolkit. They say that technology enables even the smallest players to punch above their weight.
“Think of your digital operations like a house. Would you sleep easy with your door unlocked? Probably not. Yet, many SMEs treat cybersecurity as an afterthought. Tools like endpoint protection, firewalls, and dark web monitoring aren’t just for tech giants — they’re affordable lifelines. SMEs need to move from a reactive mindset to a proactive prevention mindset,” says Shah.
Cash flow is another major pressure point for MSMEs and cloud-based accounting tools, digital payment platforms, et cetera, can offer real-time clarity, helping predict cash gaps, automate invoicing, and guide smarter financial decisions, adds Shah.
Risk management as a core part of growth
Both Chowdary and Shah state that risk management should be seen as an investment that supports growth. “For instance, liability insurance empowers businesses to take on bigger projects with peace of mind. Setting aside even a small emergency fund can create crucial stability when cash flow slows unexpectedly,” adds Chowdary.
Shah calls risk management a growth enabler. “A single cyberattack can cost an SME about Rs 3.5 crore, while affordable tools like cyber insurance or endpoint security can safeguard against future cyber incidents. Similarly, cloud-based financial tools or invoice financing can turn cash flow challenges into strengths, and AI-driven supply chain platforms can make your operations resilient,” adds Shah.
