Community Ties: The Hidden Strength Behind SME Success

Community Ties: The Hidden Strength Behind SME Success

A network of interconnected relationships creates strength—shaping both business pursuits and collective identity. James Varghese reflects on a timeless Indian value that continues to power SME growth: the strength of community ties.

For small and medium enterprises (SMEs), growth rarely happens in isolation. Beyond capital, technology, and ambition, there is a less visible but equally powerful factor that shapes entrepreneurial journeys: community ties.

Strong community connections provide SMEs with trust, reputation, access to markets, and resilience in times of crisis. They form the invisible infrastructure that helps businesses thrive. The story of Mr. Gosar, a chartered accountant in Mumbai, offers a vivid example of how community networks can anchor and expand entrepreneurial success.

The Story of Mr. Gosar: A Chartered Accountant Rooted in His Community

In the heart of Mumbai, Mr. Gosar established his practice as one of the few chartered accountants of his generation. From the start, he drew strength from his roots in the Kachi community—a group known for its entrepreneurial spirit and deep business networks.

The Kutchi community has a long tradition of encouraging its youth to enter business rather than salaried employment. Success is measured not only in profits but also in the ability to tackle and overcome business challenges. Those who solve complex problems early in their careers earn respect, prestige, and even stronger family and social recognition.

Leveraging this strong community foundation, Gosar quickly built a thriving practice. His clients came from diverse industries—paper mills, textiles, hospitality, FMCG, and manufacturing. Because his reputation was already strong within the community, referrals and trust flowed naturally.

Like many chartered accountants, Gosar also expanded into allied services. By partnering with an associate in the insurance business, he could serve his clients more holistically managing their tax planning, financial strategies, and personal investments. With his cousin as a development officer at LIC, he built a seamless ecosystem of support for his clients. In time, nearly half of his revenue came from these allied services.

Gosar’s story highlights how deep community ties provide a platform for business diversification, resilience, and growth.

Why Community Ties Matter for SMEs

While Gosar’s journey is unique, his success reflects a universal truth: SMEs thrive when they are deeply embedded in their communities.

Here are the key ways community ties support small and medium enterprises:

1. Enhanced Reputation and Customer Loyalty

Businesses that are active in their community—supporting events, mentoring youth, or simply being reliable partners—build reputations that translate directly into customer trust and loyalty.

2. Access to Local Talent

Strong local networks help SMEs recruit skilled and committed employees who align with the business’s values and culture. In smaller ecosystems, word-of-mouth often serves as the most effective talent pipeline.

3. Collaborative Opportunities

Community ties make collaboration natural. Whether through referrals, shared infrastructure, or resource pooling, SMEs gain opportunities that would be difficult to access alone.

4. Innovation and Growth

Close engagement with community needs can spark innovation. SMEs rooted in their communities are often the first to identify gaps in services or products and can adapt faster than larger competitors.

5. Resilience and Sustainability

During downturns or crises, community support often makes the difference between survival and closure. Trusted local relationships create a safety net of advice, resources, and encouragement.

6. Social Responsibility and Ethical Practices

When businesses are woven into the fabric of their community, they naturally adopt practices that prioritize ethical behavior, sustainability, and social contribution.

The Power of Family Businesses

Family-owned SMEs represent one of the strongest examples of community-based enterprises. Intergenerational values, a sense of identity, and cultural continuity give these businesses unique resilience.

However, this strength can also create challenges. Emotional ties may sometimes cloud business decisions, leading to resistance to external funding, reluctance to delegate, or choices driven by legacy rather than strategy.

Balancing tradition with professional management is critical for family-run SMEs to remain competitive while retaining their cultural ethos.

Local Networks: A Business Safety Net

For many SMEs, local networks are lifelines. When financial difficulties arise, when talent is hard to find, or when navigating regulatory hurdles, local networks often step in with solutions.

Beyond crisis support, these networks fuel growth. They open doors to referrals, collaborations, mentorship, and shared opportunities. They provide entrepreneurs with the confidence that they are not alone in their journey.

A strong local network could mean that a supplier, a partner, or even just advice is available whenever the need arises.

Industry Clusters: Scaling Through Collective Strength

Beyond individual networks, industry clusters—geographic concentrations of SMEs in similar sectors—create powerful ecosystems. By pooling resources, sharing knowledge, and negotiating collectively, clusters allow SMEs to achieve economies of scale usually reserved for larger corporations.

Clusters also have a social dimension. They act as micro-economies that support employment, reduce poverty, and generate inclusive growth. UNIDO has emphasized the role of clusters in driving “pro-poor growth” by creating sustainable jobs, affordable services, and community empowerment.

For SMEs in India, where infrastructure gaps and fragmented markets often hinder growth, clustering provides a path to scale and resilience.

Conclusion: Building SMEs on the Strength of Community

Mr. Gosar’s story is not just about one man’s entrepreneurial journey; it is a reminder that no SME succeeds alone. Community ties—whether through family, local networks, or industry clusters—are the invisible scaffolding that supports entrepreneurial ambition.

Research confirms this: according to a recent Aviva report, 89% of SMEs confident about their growth prospects in 2025 feel connected to their local community.

For SMEs, the way forward is clear. Build businesses that are not only financially sound but also deeply rooted in their communities. Engage with local networks, balance tradition along with professional practices, and leverage the power of clusters and platforms.

The strongest SMEs are not just businesses. They are communities in motion.

At ArthaVerse, we believe that fostering community connections is as critical as financial support or technical mentoring. By strengthening the ties between entrepreneurs, families, and local networks, we create businesses that are sustainable and socially impactful.