Identification of Factors Influencing the Performance of Small Medium Enterprises (SMEs)

Abstract

Small and medium enterprises (SMEs) have an important role in economic development in Indonesia. The increasing number of SMEs caused competition becomes increasingly fierce. This made SMEs experiencing more severe challenge to be able to maintain their existence and expand its business. Performance measurement for SMEs is still not well established such as the performance measurement in the big company. This paper aims to propose a conceptual framework for measuring the performance that can be used by SMEs. Several factors are proposed including entrepreneurial aspects, competence of human resource, innovativeness, and sustainability. The method used in this study are quantitative method with conduct a survey in Small and Medium Enterprises (SMEs) in Bandung. The result from this study is a conceptual framework for measuring the performance of SMEs, in which each factor has a significant correlation to the performance measurement of SMEs. This research is expected to contribute as the literature used by academics and SMEs to effectively measure SMEs performance, especially in a competitive environment.