Advantages And Disadvantages Of SME

George 's Train Shop is a family owned business that focuses on the sales and repairs of train toys. George is running a profitable business, but as he is aware of my MBA Managerial Finance class, he has asked for advice on his working capital practices. Although George is currently enjoying the benefits of a profitable business, there are opportunities for him to expand his business ventures. This first starts by dissecting degree of aggressiveness in working capital practices, current capital budgeting practices, and areas where he can improve in both arenas. In addition, careful management of the company 's cash flow will

Factoring has been used in increasing popularity for small and medium sized enterprises because these firms do not have the advantage of a large firm in terms of borrowing and therefore, rely on factoring for their working capital (Borgia et al 2010).

Small businesses are becoming a trend in the work environment today. The analogy of small businesses to large business brings about the question, “Can they eventually equal up in the world

The dynamic role of small and medium enterprises (SMEs) in developing countries as engines through which the growth objectives of developing countries can be achieved has long been recognized.

Many organizations have maximized the use of cash on hand by effective cash management techniques and the use of short-term financing. This paper will discuss various cash management techniques and short-term financing methods used by organizations.

This report looks at the benefits and challenges SME in working with MNCs, and examines strategies for establishing SME-MNC connections and relationship, allowing them to open new horizon & improve their abilities to expand and prosper. For MNCs, working with SMEs can bring benefits such as lower costs, enhanced innovative capacity, and increased flexibility in responding to changing conditions. The JAR submission format would layout are in following sequence of: Introduction; Reason for choosing the article; Article Summary; Article Critique; Concluding Comments and last but not lease, References.

We were given an assignment to find out the Financial scenario of managing working capital in Bangladesh. To get a good understanding of the topic, we first analyzed the theoretical methods of managing working capital. Based on our theoretical understanding we selected cement firms is one of the booming industries in Bangladesh now, we decided to pick all four firms from this industry, so that we can collect full scenario at least of one industry, with the help of descriptive financial statement analysis. We managed to collect all the relevant data and identified majority of the similarities and differences between theories and practical of working capital management. When we pick up the company we found out their

SMEs (Small and Medium enterprises) are one of the key drivers of India’s economic growth. Over the years a large number of small and medium size companies have grown in the market. Small and Medium Enterprises (SMEs) have been contributing so much towards the GDP of India. With their emergence and huge potential, the government of India launched regulated trading platforms for the SMEs, which allows them to get listed without bringing an IPO. The stock exchanges for these enterprises were introduced so that these firms can do better in financing activities for themselves. Of course, there is an option of adding debt, which also helps improve the overall return on equity, but the cost of raising debt for SMEs is relatively higher. High interest expense does not look very good on the profit and loss statement of a growing company. Thus, in order to fund the next stage of growth without excessive interest cost burden, companies look to access equity funds via capital markets. This is where listing on an exchange comes into the picture. The research would include the implications of the introduction of the BSE and NSE SME stock exchanges how well they are performing. Also, what is the response from the SME sector.

Small to Medium Enterprises (SMEs) form the majority of the enterprises in Singapore’s economy. They employ over 70% of Singapore’s workforce and generate about 50% of the country’s total GDP. Most SMEs in Singapore grow from small enterprises into large competitive companies. Manufacturing and wholesale SME sectors have increased impressively with the number of employees in these sectors increasing by up to 8%. SMEs in the Finance, Property and holdings sector hold the top three sectors in terms of the amount of profits accrued. Competitive strategies in Singapore’s SMEs are based on the “3MK” key success factors; Management, Markets, Money and Knowhow (Bull & Winter, 1991). In this paper, the contribution of SMEs to Singapore, the economic constraints that face them, and the steps that can be taken to strengthen SMEs to ensure its sustained contribution to Singapore‘s economy will be discussed.

Most Institutions use number of employees and turnover or revenue as dimensions to characterize SME size. Nonetheless, since these dimensions are strongly related with economy situation of the region or country in which SME operates, ones may find broad definitions or restriction to SMEs definition. The United States of America for instance, defined SME as enterprise which has employees not more than 500 and receives turnover

Abstract: This article examines which types of finance are more suitable for the SMEs, also analysing the disadvantages on them when raising finance. Unlike the large companies,

In the Philippines, MSMEs can be considered as the backbone of the economy as they are major contributors of job creation and play a vital role as providers of goods and services to large firms. In fact, 99.6% out of 941,174 establishments in 2013 are micro, small, and medium enterprises. However, the attrition rates for startup MSMEs in the country can go as high as 50 percent, which means that many MSMEs are having a difficult time keeping their business alive. According to Fatoki (2014), one of the key reasons why startup businesses fail is the lack of management control. This commonly leads to poor use of accounting information to manage finances and cash flow. Additionally, the often neglected area in managing MSMEs is the accounting and finance function, which actually handles the accounting information needed to properly manage a business.

For Small and Medium-sized enterprises (SMEs), the capacity to grow and compete on the market is highly dependent on them being able to achieve adequate financing solutions and capital (Bruns, 2004; Binks et al. 1992). Sources of such financing can be either internal or external to these enterprises, however research identifies external financing, and particularly bank financing as the most common source (Barton & Matthews, 1989; Jacobson, Lindé & Roszbach, 2005; McKinsey & Company, 2005).

This paper seeks to examine the importance of working capital to a business. By definition, in order for a business to conduct its daily operations, such as payment of wages, the purchase of raw materials, it requires funds which are referred to a, working capital which also covers overhead costs. Companies aspire to maintain their cash at a desirable level in order to offset liabilities on maturity and the availability of production materials require by the business to provide customers’ needs indicates the importance of working capital. Working capital can be sub-divided into two areas, that is, regular working capital – it provides a steady base for overall business objectives; and short-term working capital that is used to facilitate the day-to-day business operations. There are various sources of finance for working capital which include retained earnings, credit from suppliers, and long-term loans from financial institutions or proceeds from sale of assets. Generally, investment in working capital could be grouped into permanent and variable. Permanent investment in working is the portion of working capital kept to sustain the level of sales which is not affected by seasonality while variable working capital is the additional working capital required during periods of fluctuations in sales. It is expected the permanent working capital would be financed by long term capital while variable working capital is financed by short term capital.

There are all types of risks involved if one is small business manager or a manager of a larger corporation. The responsibilities on a day-to-day basis can be vital towards the success of the organization. The company facilities can be associated with working capital, production, and sales. The manager would need to reflect a common awareness of the potential risks that can be involved. Although, there can always be a risk involved in an organization, the manager would and should have the capability to identify the type of risks that the company can surface. In this paper, one will provide a further explanation on the various risks and along with presenting a way for financial managers on a moderate approach towards these risks.