Record Details

Financial management practices in successful Small and Medium Enterprises (SMEs)

Southern African Journal of Entrepreneurship and Small Business Management


 
 
Field Value
 
Title Financial management practices in successful Small and Medium Enterprises (SMEs)
 
Creator Wolmarans, Hendrik Petrus Meintjes, Quentin
 
Subject — —
Description Although the success of small, medium and micro enterprises (SMEs) is extremely important for the South African economy, their failure rate is amongst the highest in the world; some researchers estimate as high as 90 percent. Research has shown that the lack of financial management skills and application of financial management practices are some of the biggest factors contributing to SME failure. However, it is not clear from the literature which of these skills and practices are more important than others. This study aims to fill this gap by determining which financial management skills are relevant for successful SMEs. A survey was done on a sample of owner-managers of successful SMEs who had been asked, firstly, whether they performed different financial management practices and, secondly, how frequently they performed these in their companies. The study concludes that practices regarding working capital as well as profitability are much more relevant than those regarding a balance sheet or strategic finance. Similarly, financial practices related to cash flow and decision making are more relevant than those related to planning or analysing. It may be true, due to the high risk and volatile environment of SMEs, as well as the challenges that are often underestimated, that financial practices which academics regard as important are not always implemented by these companies.  This study contributes to the existing body of knowledge as it determines the relative relevance and frequency of use of financial management practices by successful SMEs.KEY WORDS Small and medium enterprises, Financial management practices, Successful SMEs, Entrepreneurship education
 
Publisher AOSIS Publishing
 
Contributor
Date 2015-07-01
 
Type info:eu-repo/semantics/article info:eu-repo/semantics/publishedVersion — —
Format application/pdf
Identifier 10.4102/sajesbm.v7i1.8
 
Source The Southern African Journal of Entrepreneurship and Small Business Management; Vol 7, No 1 (2015); 88 - 116 2071-3185 1015-3977
 
Language eng
 
Relation https://sajesbm.co.za/index.php/sajesbm/article/view/8/10
 
Coverage — — —
Rights Copyright (c) 2015 The Southern African Journal of Entrepreneurship and Small Business Management