Development Of Small And Medium Enterprises Research Articles

PENGENALAN PENGUKURAN KELAYAKAN FINANCIAL PADA UMKM PD PUTRI DI PGC JAKARTA TIMUR

The financial feasibility measurement introduction training conducted by the Community Service team had the main objective of providing assistance to PD PUTRI's Small and Medium Enterprises (SMEs) in conducting a comprehensive evaluation of the financial feasibility of their development business. The training process covered several important aspects, including investment and production cost analysis, cost of goods sold, and business feasibility criteria such as Break Even Point (BEP), Net Present Value (NPV), Payback Period (PP), Internal Rate of Return (IRR), and Profitability Index (PI). In addition, in the context of SME development, careful planning requires serious consideration regarding the addition of working capital. The allocation of working capital by SMEs is crucial in providing the technology, equipment, and facilities and infrastructure needed to run the business optimally. Financial feasibility analysis is a key instrument in assessing whether the planned business can provide adequate profits and whether it is economically viable. Within the framework of raising working capital, aspects such as capital utilization efficiency, investment strategy, and risk management are also a key focus. This training aims to equip PD PUTRI's SME team with the knowledge and skills needed to design and evaluate a development strategy based on an in-depth financial feasibility analysis. As a result of the training, PD PUTRI SMEs are expected to make more informed decisions and optimize their working capital management. In addition, it is also expected to improve business competitiveness through a better understanding of the financial factors that influence business viability and sustainability

Pro-environmental improving products Qualityin SMEs from the Visegrad Group Countries (V4)

Purpose: The aim of the article was to analyse the pro-environmental approach to products improvement by SMEs from the Visegrad Group (V4) countries. Design/methodology/approach: The research was survey. The survey research was carried out in traditional (paper) and electronic form (MS FORMS). The survey was directed at electronic industries (machinery processing) belonging to small and medium enterprises (SMEs) from V4 countries. The results presented in the article refer to sample size of 379 SMEs, obtained between March and September 2023. Results were analysed in statistical way, i.e.: ANOVA test and Mann Whitney U test by significance level equal to α = 0.05. Findings: SMEs in V4 countries have a similar approach to pro-environmental improving of products. It was shown that pro-environmental activities of SMEs from the V4 countries, the lowest consistency of assessments occurs in the following countries: Poland and Slovakia, Poland and Hungary, Slovakia and Hungary. Practical implications: The research results may contribute to more effective and coherent development activities of SMEs in the V4 countries as part of their sustainable development, and also to take appropriate actions that will be supporting qualitative and environmental products. Social implications: The results can help SME entrepreneurs improve their products to protect the natural environment. In addition, they can be the basis for the development of SMEs from the V4 countries and their unidirectional development, which includes not only improving the quality of products, but also caring for the environment. Originality/value: The originality of the research is the determination of the current pro-environmental approach to product improvement in SMEs in the V4 countries. The novelty is the provision of current data on the importance of improving pro-environmental products in SMEs from the V4 countries and their comparison between companies in the electrical machinery industry. Keywords: Visegrad Group (V4), SMEs, environment, quality, product improvement, production engineering. Category of the paper: Research paper.

An assessment on the Impact of Financial Products and Services Accessibility on SME Growth and Development in Zimbabwe

This study investigates how the access to financial products and services affect growth and development of the Small and Medium Enterprises (SMEs) in Zimbabwe. The study uses a mixed-methods approach that combines primary data collected from self-administered questionnaires targeted at SMEs owner-manager by incorporating secondary sources from monetary policy statement, World Bank financial statistics, and scholarly literature. The objective of this all-inclusive data collection approach is to present, an overall picture of the financial infrastructure for SMEs in Zimbabwe which is focused on both access to Finance and the impact of financial services on SME growth. The survey instruments were, therefore, developed to provide more nuanced feedback on the twin issues, inquiring both qualitatively and quantitatively about notions of SMEs’ involvement with financial services. The secondary data assists to present these findings within the broad economic environment; thus, a macro-level perspective of the challenges and opportunities that are facing SMEs in Zimbabwe is provided. The anticipated outcomes of the research aim at improving knowledge about of the role of financial accessibility in supporting growth and development of SMEs in a developing country. Thus, we note the lack of policies that increase the financial inclusion and ensure the SMEs as major development engines.

THE PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES IN YEMEN: A CROSS-SECTIONAL STUDY

Due to the importance of the contribution of Small and Medium Enterprises (SMEs) towards development worldwide, researchers in different contexts have investigated the development of SMEs and how economic development can be driven forward by supporting the SME sector. However, when it comes to lower-income economies, literature is scant in investigating the performance and the development of the contribution of SMEs towards economic development in lower-income economies. Hence, the aim of this article is to explore the extent and status of small and medium enterprises in Yemen as a lower-income economy and how their performance varies according to their characteristics. The article adopts cross-sectional quantitative methodologies, it relies on primary data collected conveniently from 400 owners and managers of manufacturing SMEs in Yemen. Descriptive analysis is used to explore the extent of SMEs' performance, and further, variance analysis using Independent Sample t-test and One Way ANOVA in order to explore the variance in the performance according to the variance of enterprise characteristics. The findings indicated a low extent of business performance among manufacturing SMEs, where the mean score of the overall extent ranges from 4.94 to 5.06 out of 7. Further, The result of running One Way ANOVA revealed that the scope of operation, age, and position of managers, in addition to owning a share of enterprises, significantly contribute to the variance in the business performance among manufacturing SMEs (P < 0.05). These results can benefit the managers and owners of SMEs in Yemen and other similar economies by focusing on the extent of performance that their management can target. The implication of this research is summarized by discussing the performance of SMEs in lower-income economies to draw the attention of authors and scholars toward investigating the role and contribution of SMEs in economic development and welfare in lower-income economies.

Pelatihan Umkm Pada Desa Sumber Rejo, Kabupaten Semarang, Jawa Tengah

This training discusses human resource management (HR) in the digital era and efforts to increase the productivity of small and medium enterprises (SMEs). This training involves analyzing the competencies required by human resources professionals and their role in designing effective strategies and policies for HR management in organizations. Apart from that, this training also highlights the challenges faced by SMEs, especially in terms of low levels of productivity, added value and product quality. The training results show that human resources professionals need to master strategic competencies which include an understanding of organizational values, talent management, leadership, and the use of digital technology. Apart from that, it is also important for them to be able to position the business strategically, build relationships based on trust, and manage various pressures in the business. This training provides valuable insight for human resources professionals and SME stakeholders in understanding the importance of HR management in the digital era and increasing SME productivity. Implementing effective strategies in managing human resources and increasing productivity will help achieve the goals of sustainable SME development and a more significant contribution to the national economy.

Pembuatan Aplikasi Penerimaan Bantuan Barang Di Usaha Kecil Menengah Pada Disperindagkop Provinsi Kalimantan Timur

This research aims to develop an application for receiving goods assistance for small and medium enterprises (SMEs) in East Kalimantan Province. This application is designed to help the Department of Industry, Trade, Cooperatives, and SMEs of East Kalimantan Province to facilitate the input and output of data on SME submission goods that have been registered with the cooperative. The method used in this research is the Prototype Method. The Prototype method is an early version of a software system stage that is used to present an overview of ideas, experiment a design, find as many problems as possible and find solutions to problem solving. This method aims to describe the functions, features, and interfaces of the product more concretely. The results show that this application will allow assistance applicants to apply online, track the status of their application, and receive notifications about the progress of the application. In addition, this application will also make it easier for officers to manage and process applications, thereby minimizing errors and increasing efficiency. In conclusion, with this application, it is expected that the process of receiving goods assistance for SMEs can become faster, easier, and more transparent, which will ultimately support the development of SMEs in East Kalimantan Province.

Analisis Faktor-Faktor yang Mempengaruhi Praktik Akuntansi Manajemen pada Usaha Kecil dan Menengah di Kota Padang

Small and medium enterprises (SMEs) create a major contribution to the country's economic growth. The development of SMEs can be encouraged by the use of management accounting practices (MAPs) as a basis for decision making in order that their business performances become effective and efficient in achieving goals. However, a few research has been done on MAPs in SMEs in developing countries. This study aims to show what contingency factors (company size, owner participation, market competition, and information technology) affect the implementation of MAPs in the SMEs sector in one of the SMEs central cities in developing country (Indonesia). namely the city of Padang. This study employs a quantitative descriptive survey method, by distributing questionnaires. A sample of 96 respondents was determined by purposive sampling technique. The respondents of the study are owners or staff/managers of SMEs accounting/finance. Multiple regression analysis with SPSS 29 is used to analyze the data. The results of the study conclude that the level of company size, owner participation, market competition, and information technology has a positive and significant effect on the implementation of MAPs by SMEs. This research is expected to be a reference for further research in the field of management accounting and corporate governance in SMEs.

Peningkatan Kinerja UMKM Melalui Peran Strategi Pemasaran di Desa Lilibooi, Leihitu Barat, Kabupaten Maluku Tengah

Lilibooi Village is in West Leihitu District, Central Maluku Province. Lilibooi Village has great natural potential so that apart from attracting tourists to visit because of its natural beauty, it is also because of its large natural resources in the agricultural sector. Small and Medium Enterprises (SMEs) in this village are already running but are still on a small scale and need to be improved. There are many challenges faced by SMEs today, including SMEs in Central Maluku, especially in Lilibooi, which are still faced with a lack of understanding about the importance of information technology, online promotions, business locations and product quality. Marketing strategies are needed to increase the sales volume of each SME player and introduce SME products more widely. The aim of this community service activity is to answer the problems faced by SMEs in Lilibooi Village by providing outreach and sharing knowledge so that SME actors in the village can apply it to improve SME performance. The socialization material provided is related to several issues that are not yet understood so that it can encourage SME marketing. The result of this service is the absorption of knowledge and skills from SME players in understanding the role of marketing strategy through material in the form of applying technology to SME operations, promotions, business locations and product quality. The development of SMEs can have an influence on improving their performance. With this marketing strategy effort, it can increase the income of SME players.Keywords: Product Quality, Business Location, Promotion, Information Technology, SME

State support for small and Medium-sized businesses as the Most important factor in Political stability

the purpose of the article is to study the mechanisms and instruments of state support for small and medium enterprises (SMEs) as a factor of political stability. To do this, it is necessary to substantiate the relevance of state support for SMEs in Russia; consider strategic priorities and directions for expanding its capacity; highlight the urgent problems of the systemic strategic development of SMEs in the current market macroeconomic conditions; outline the prospects for the development of SMEs based on the construction of a matrix of predictable risks. Materials and research methods. In the course of the work, a wide range of research methods was used. The use of the legal and regulatory method makes it possible to characterize the key elements of the domestic legal field related to state regulation of SMEs. Within the framework of the statistical method, the formation of the information base necessary for the study of the current state and development trends of SMEs is carried out. On the basis of the logical method, causal relationships are built between the patterns of development of SMEs and market factors that influence it. The analytical method creates conditions for the use of verified diagnostic tools for key performance indicators of SMEs. When using the monographic method, the most important regularities and features of the development of SMEs are focused in the current macroeconomic environment.

ICT's Impact on SMEs in Zanzibar: A 360-Degree Appraisal

The integral role of Information and Communications Technology (ICT) in global socio-economic growth is universally acknowledged. Zanzibar, too, recognizes ICT's potential to foster enterprise development. This study conducts a focused analysis of the symbiotic relationship between ICT and small and medium enterprises (SMEs) in Zanzibar, encompassing ICT's significance, adoption challenges, and its impact on SMEs' growth. Employing a descriptive research design, data collection involved a structured questionnaire distributed to a random sample of 100 respondents. Analysis was conducted using the Statistical Package for Social Science (SPSS), yielding insights communicated through percentages, tables, and graphs. The findings underscore ICT's pivotal role in SME development, with a substantial proportion deriving benefits from its integration. Key variables—ICT's importance, implementation, and influence—are identified as catalysts for improved SME performance. However, challenges persist, including limited expertise, slow internet, setup costs, and security concerns, underscoring the need for refined ICT strategies. Recommendations echo the importance of continuous ICT enhancement, advocating for advanced tools to secure competitive advantages. Moreover, policy interventions by governmental bodies and private entities like the Chamber of Commerce are deemed necessary to facilitate SME education, training, and advisory services. This collective effort promises not only individual business growth but also national economic advancement.In summation, while ICT is a linchpin, factors like technology, customer care, and trust are equally vital. Governmental support for SMEs' effective ICT integration emerges as a core necessity, propelling Zanzibar's SMEs towards amplified growth within an increasingly digital landscape.

COGNITIVE BIAS ANALYSIS TERHADAP KINERJA USAHA KECIL DAN MENENGAH (UKM) DENGAN KEPUTUSAN INVESTASI SEBAGAI VARIABEL INTERVENING PADA MASA PANDEMI COVID 19

This study aims to analyze the Effect of Cognitive Bias on Company Performance with Investment Decisions as an Intervening Variable in Small and Medium Enterprises (SMEs) on Lombok Island during the Covid 19 Pandemic. The theoretical contribution of this research is expected to contribute to science and theory development behavioral finance related to investment decision making and company performance in Small and Medium Enterprises (SMEs). In addition, it is also expected that behavioral finance will become the subject of discussion in financial management courses. Furthermore, the practical contribution of this research is expected to provide input, suggestions and recommendations to the policy makers of the NTB Provincial Government in making policies related to the development of SMEs.
 This research is a quantitative approach-based research, with explanatory research as the type of research. The research population is all SMEs on the island of Lombok. The sampling technique was carried out using non-probability sampling, namely using judgment sampling, namely selecting SMEs engaged in the pottery industry and already exporting. From the existing population, there are 34 (thirty four) SMEs that can be taken as samples. Respondents in this study are the owners of each of these SMEs. The data collection technique used in this study was a questionnaire. In order to achieve the research objectives and to test the hypothesis, the data obtained will be processed as needed using the GSCA (Generalized Structured Component Analysis) statistical tool.
 The results of the study show that Cognitive Bias have a positive and significant effect on company performance. The decision to place funds for working capital does not intervene with Cognitive Bias on Company Performance in Small and Medium Enterprises (SMEs) on Lombok Island during the Covid 19 Pandemic. Most of them have high school and university education and the length of business is more than 15 (fifteen) years.

Efektifitas Digital Branding, Peningkatan Engagement Dan Promosi Terhadap Penjualan Produk UKM Melalui Media Sosial: Eksistensi UKM Kelurahan Batu Aji

Business ideas are affected not only by markets, companies and competitors, but also by changes. Everyone, even large companies, must recognise this. To maintain the "economic" aspect of society, various studies have been conducted to examine good alternative marketing strategies. This study focuses on small and medium enterprises (SMEs) because SMEs have become part of the creative economy. Therefore, the researcher encourages to examine which digital branding strategies are most widely implemented by SMEs. This study describes how to use strategies to increase engagement and patronage of products, how to make products recognised by the wider community through social media, and how to choose the most effective social media to market products, this study focuses on social media. This study uses a qualitative descriptive method, namely library research through books, journals, and relevant websites. The results of this study show that brand strategy is very important for the development of SMEs and can be more easily implemented for SMEs through digital.

Blockchain Technology and Small and Medium Enterprises Access to Finance

Small and medium enterprises (SMEs) are essential in developing the world economy. However, they face financing distress due to high information asymmetry and lack of collateral and credit. From the enterprises sustainable development perspective in the big data era, this study explores whether and how blockchain technology can alleviate the information asymmetry problems of SMEs and further improve the convenience of accessing finance. Blockchain technologys decentralized, unchangeable, and transparent natures can reduce information asymmetry between SMEs and the financing parties. SMEs become more creditable to the bank with a more transparent share of businesses operation information and financial conditions based on blockchain. At the same time, market investors can also learn more about the operation of corporate funds. Overall, this study provides new insights on how to use blockchain technology to increase SMEs development efficiency by lessening information asymmetry, reducing the cost of equity and bond financing for SMEs, and effectively reducing SMEs financing difficulties in this age of big data.

Bibliometrics Analysis of The Entrepreneurial Leadership on The Small Medium Enterprises

Current entrepreneurial leadership is crucial for Small and Medium Enterprises (SMEs) in general. Furthermore, it can be emphasized that leadership is highly necessary for business development. Leadership is defined as the ability of an individual with authority to utilize power according to their capacity as a leader, the strength, and the identity of a product to face highly dynamic business competition. Based on this foundation, the study aimed to determine the position of Entrepreneurial Leadership in SMEs within the scope of research using bibliometric techniques. The research method used was descriptive quantitative. Bibliometric analysis was conducted on the research data using bibliometric techniques. Bibliometric indicators were applied to evaluate bibliographic data, including total authors and published articles, citations, institutions, and countries participating in research development. Additionally, documentation techniques and literature studies obtained from Scopus and Google Scholar databases were utilized. The findings of this research reveal the identification of a keyword network connecting one study to another, including the most frequently used keywords as well as the least utilized keywords by researchers. In this study, "entrepreneurial leadership" is among the least commonly employed keywords in research related to innovation or SMEs development.

Development strategies for creative small and medium enterprises (SMEs): A Quintuple Helix Model approach to support smart city initiatives

This study explores the development of Creative Small and Medium-Sized Enterprises (SMEs) in the food, textile, and handicraft sectors in Jambi City, employing the quintuple helix model to align with the Smart City concept. The research gathered primary data through surveys, interviews, and focused group discussions (FGDs). The study encompassed a diverse range of stakeholders from the specified sectors, with a sample size of 100 individuals. A mixed-method research approach was adopted, integrating both qualitative and quantitative methods. Analytical tools such as the Likert scale, SWOT analysis, and the quintuple helix model were employed for data analysis and interpretation. The findings reveal that many participants in these sectors were women, predominantly with high school-level education. The age group of 46-55 years was most represented among the respondents. Notably, the food sector emerged as the dominant industry among the studied SMEs, attributed to its relative ease of establishment and cost-effectiveness compared to the textile and handicraft sectors. The study also examined the perceptions of the roles of quintuple helix actors (government, academia, industry, society, and social environment) in the development of these SMEs. The findings indicate a generally positive perception, suggesting effective fulfillment of roles by these actors. This collaborative effort within the quintuple helix framework has positively impacted the development of creative SMEs in Jambi City, contributing significantly to the Smart City initiative. The study underscores the importance of such collaboration in fostering the growth and sustainability of creative SMEs in the context of urban development.

PENGEMBANGAN METODE COBLAS (Consulting Based Learning for ASEAN SMEs) UNTUK PENDIDIKAN KEWIRAUSAHAAN LANSIA DI USAHA KECIL MENENGAH (UKM)

The purpose of this research is to develop the COBLAS (Consulting Based Learning for ASEAN SMEs) method as an innovative approach in teaching entrepreneurship to elderly groups in the Small and Medium Enterprises (SMEs) environment. The presence of older people in the business sector has potential that can be optimized with an appropriate learning approach. The COBLAS method, which has been successfully applied in supporting the development of SMEs in ASEAN countries, will be adapted and applied in the context of teaching entrepreneurship to the elderly in SMEs. This research adopts a descriptive qualitative approach with data collection methods through literature study, field observation, and interviews. Research participants included elderly SMEs and experts in education and entrepreneurship. The collected data were analyzed through the process of data reduction, data presentation, and verification. The results of this study provide an important contribution in the development of entrepreneurship learning methods that are in accordance with the characteristics and potential of the elderly in SMEs. The adaptation of the COBLAS method provide practical guidelines in designing effective and inclusive entrepreneurship teaching programs for the elderly in SMEs. As a result, this research has significant implications in maximizing the role and contribution of older adults in local economic development and sustainable development.

Development of Entrepreneurship in India: Challenges and Possibilities

Entrepreneurship is a dynamic process of vision, change and creation .it requires an application of energy and passion towards the creation and implementation of new ideas and creative solutions. There are several forces like automation as a result of technological advancement, vacillate economies or changes in demographical position that have brought new opportunities along with threats for modern organizations and societies which greatly influence the mobilization of the development of entrepreneurship. People are becoming more and more aware of the importance of the development of entrepreneurship so as to adapt to these moving powers. The study showed emerging opportunities for entrepreneurs and also Entrepreneurship development is concerned with the study of entrepreneurial behavior, the dynamics of business set-up, development and expansion of the enterprise. Entrepreneurship development (ED) refers to “the process of enhancing entrepreneurial skills and knowledge through structured training and institution-building programmes”. It basically aims to enlarge the base of entrepreneurs in order to hasten the pace at which new ventures are created. This accelerates employment generation and economic development. Entrepreneurship development focuses on the individual who wishes to start or expand a business. Small and medium enterprise (SME) devel­opment, on the other hand, it also focuses on developing the enterprise, whether or not it employs or is led by individuals who can be considered entrepreneurial. Furthermore, entrepreneurship development concentrates more on growth potential and innovation, than SME development does

Overconfidence and Herding Bias on Investment Decisions the Role of Risk Perception as a Mediator

Aims: The investment decision is essential in Small and Medium Enterprises (SMEs). The behavioral financial theory explains that behavioral biases and risk perceptions of SME owners will influence investment decisions. This study highlights the relationship between overconfidence and herding bias toward investment decisions mediated by Risk Perception.
 Study Design: The research population is SME owners in Banyumas Regency. The sample used was 118 SME owners. The data was collected using a questionnaire distributed to SME owners.
 Methodology: This study uses the PLS-SEM analysis tool. The method used to gather the data was purposeful sampling. Test the validity and reliability using the outer model. Hypothesis testing uses the inner model.
 Results: The study proves that partial overconfidence and herding bias positively affect risk perception. Overconfidence, herding bias, and Risk Perception positively affect investment decisions. The research results have not been able to prove that there is a mediating effect of risk perception on the relationship between overconfidence and herding bias on investment decisions. This research has theoretical and practical implications. Theoretical implications, especially for developing financial behavioral theory in investment decisions. For practical implications for stakeholders in SME development, it is necessary to pay attention to the behavioral biases in SME owners.

Staffing and the Development of Small Scale Enterprises in Owo Local Government, Ondo State, Nigeria

Regardless of long list of responsibilities and functions that require sufficient number of employees of different professional background, enterprises most especially in developing countries are still manned by insufficient staff. Small and Medium Enterprises (SMEs) are now taken different steps to curb the situation and bridge the gap between the required staff and the existing ones. The study therefore seeks to investigate Staffing and the development of SMEs in Owo local government, Ondo State, Nigeria. The specific objective of the study is to determine the extent effect of recruitment and selection on productivity and examine the effect of Placement and orientation on the development of staff on the survival of selected SMEs in Owo local government. Survey research design which is quantitative approaches to the study was employed by the researcher. Questionnaire was used as means of selection of the respondents that included questions measuring perceptions of the respondent. The population of the study covers a total number of 1005 staff of twenty-three (23) Retails enterprises, ten (10) production small scale enterprise and eighty-one (81) agro allied enterprises, with a sample of six hundred and fifty (650) drawn from the population using Krejcie and Morgan (1970). The findings of the study revealed that recruitment and selection has significant impact on the survival of SMEs in Owo Local Government, Ondo State. The study also revealed that placement and orientation significantly affect SMEs productivity, most especially in the studied area, with R2 value of 0. 787, which indicate that placement which comprises of marching the right skill with the right job and familier staff with established rules and policies actually increase productivity. Therefore, it is recommended that SMEs should identify the need for adequate staff and recruit the right candidate for the job. It is also recommended that owners and/or management of SMEs should not just recruit for the recruitment sake but place them in the appropriate place within an organization to ensure and guarantee the continuity and the survival of the business. This is because, when employees when employees are placed where they are supposed to be or based on their profession, they will be able to demonstrate professionalism which bring about continuity SMEs in terms of development.

The effect of innovation on competitive advantage and SMEs performance in Vietnam: the moderating role of customer orientation

Purpose The purpose of this paper is to find out how absorptive capacity (AC), leadership capacity (LC) and government support (GS) affect small and medium enterprises (SMEs) innovation (product innovation [PDI], process innovation [PCI] and distribution channel innovation [DCI]), taking into consideration the role of innovation (PDI, PCI and DCI) on competitive advantage and SMEs performance and the moderating role of customer orientation (CO). Design/methodology/approach This study gives a theoretical model tested using structural equation modeling. The information used to test the hypotheses came from interviews with the top managers of Vietnam’s SMEs. The 633 survey respondents from the southern part of Vietnam were chosen for the study. The goal of the 47-item questionnaire is to look at how all variables relate to each other. Findings The results show that a firm’s LC has the most significant impact on innovation, followed by its AC and GS. According to the study, DCI does not lead to competitive advantage but improves SMEs’ performance. In addition, the study’s findings indicate that CO moderates the relationship between PDI – SMEs performance and DCI – SMEs performance. Research limitations/implications The classification of only three types of innovation (PDI, PCI and DCI) restricted the applicability of the research to other kinds of innovation in SMEs. Second, only AC, LC and GS are identified in this study as external factors that influence business innovation. In this study, the authors have not studied different business industries; the authors recommend that the research in the back on SMEs should investigate their classification into distinct industry groups, including agricultural, forestry and marine products; industry and construction; and commerce and services. Practical implications This study shows the importance of innovation senior management for innovation in SMEs. This study found that innovation, especially continuous innovation, increased competitive advantage and SMEs performance. Companies that wish to innovate must have access to external resources and support. Moreover, enterprises must comprehend their consumers’ wants to achieve innovation and better SMEs’ performance. Social implications This research significantly contributes to enterprise innovation and operational efficiency for the sustainable development of SMEs in Vietnam. It is expected to enhance employment opportunities, maintain social stability and expand Vietnam’s gross domestic product. Originality/value This study contributes to the growing knowledge of the indirect and direct effects, the mediating function of innovation (PDI, PCI and DCI) on competitive advantage and SMEs performance and the moderating effect of CO.