The main essential progress which supporting the development of the economy is mentioned to be innovation. Innovation also has been acknowledged as a driver of expansion in labor productivity, money invested, and also as an essential foundation for growing progress to economic and also public issues such as change of the climate, mature civilizations, and also poverty. As support for the conditions, new entrepreneurial projects and “Small and Medium-Sized Enterprises (SMEs)” give their involvement to innovation. A huge focus on SMEs and entrepreneurship in the new projects is indeed have become an essential development as well. While the policy in the previous innovation operated throughout investments in study and expansion, a wide-ranging vision now must be engaged with the situation where the innovation appears along with the require circumstances to assist it. Innovation describes not only as a simple technology and science, instead, it is considered as a gathering of new goods and services in the entire sections of the economy, innovative approaches of marketing, and the modification in how the business organized in their industries performs, corporation of the workplace, and also exterior interaction as well. Within this structure, the creation of new company throughout entrepreneurship (which usually produces new objects of SME while rarely also create large companies) and the innovations factors in the current SMEs take an essential function.

Title Page………………………………………………………………………………….1

Executive Summary………………………………………………………………………2

Introduction……………………………………………………………………………….4

Findings…………………………………………………………………………………....5

Conclusions……………………………………………………………………………….16

Recommendations………………………………………………………………………...17

References………………………………………………………………………………....19

 Introduction of Small and Medium-Sized Enterprises (SMEs)

Innovation is conventionally observed and placed typically inside a company. But then, the growing accessibility and information movement of employees, the thriving of the internet along with the money projects in the marketplaces, and the expansion range of potential exterior providers that appear in the current stage have claimed to be responsible in weakening the efficiency of the customary innovation arrangement. Within the risen of these modifications, the idea of open innovation also has arisen as well, together with the practices which are regarded as traversing borders of the company. Businesses nowadays are eager to take in their industry type not just around their commercialization concepts, but as well as outside concepts. The study of open innovation has consequently been comprehensive to a number of viewpoints. For example, revisions that are going on the business subtleties of open innovation, also on the progress of open innovation within a specific area of the business sector, or on methods which aim to increase open innovation. In the face of the growing attention in open innovation study, some of the former revisions have been projected for executives in huge companies which functioning in the technology field, wherever the conception of open innovation is first taking place (Brunswicker & Vanhaverbeke, 2015).

Debates around the idea of open innovation in Small and Medium-Sized Enterprises (SMEs) have been omitted to commence the conventional. Therefore, this paper has some objectives to “critically evaluate contemporary issues relating to SMEs, explore strategic issues in SME management, explore alternative routes of business development in SMEs, investigate and evaluate diverse business development methods in SMEs, analyze financial aspects of business expansion in SMEs, and also critically appraise change and development processes in SMEs.”

Accounting is acknowledged as the main important part of daily activities in any companies. Therefore, to make sure that the day to day activities in the company are going smoothly, the executives or managers must have proper knowledge about accounting and also must be familiar with the diverse practices of accounting as well. SMEs found to have a deficiency of accounting staff who supposed to be responsible for the entire matters in accounting. Therefore, SMEs have to be acknowledged that since without it, the companies might get serious financial issues and lead to the unstable financial in the companies (Perera & Chand, 2015).

·         Deficiency of appropriate methods to organized and make the record files

Since the executives or managers in SMEs have a deficiency of knowledge and also lack of awareness in accounting, then it is an unsurprising fact if the companies are also unable to make appropriate methods to organized and make the file of accounting records as well. One point which becomes the reason behind this situation is that there is no lawful requirement for the financial information of SMEs to become openly revealed for the public. This issue indicates that SMEs are careless and neglected the importance and safety matters from accounting records.

·         Deficiency of the Information and Communications Technology (ICT) practice

“Information and Communications Technology (ICT)” has modified the environment of business significantly and also influenced the behaviors of the transactions activities that occur in the companies. For this reason, the companies nowadays must not do manual record on their business transactions activities since all the information are required to be computerized to create a rapid and advantages link with the consumers. Plus, the suppliers also will able to save their cost and time to ease the business operation activities as well. In the other hand, Small and Medium-Sized Enterprises (SMEs) seem to prefer to make the manual records of their business transactions activities and keep them in hard files rather than using the “Information and Communications Technology (ICT).” This condition leads to the deficiency of ICT practices among the SMEs (Matthews, 2007).

·         Limited Fiscal Assets of Small and Medium-Sized Enterprises (SMEs)

The study mentioned that SMEs are appeared to not only have limited assets in financial, but they also have the limited budget in marketing their products, give the training for the workers, and also they have a limited budget to financing their daily activities as well. The study also explained that the reasons behind this limited assets in financial are mostly because of SMEs have the deficiency of money, imperfect accounting records, lack of fiscal performance, huge costs of operational, lack channels of debt which make them difficult to get any loans to support their financial. These effects will slowly drag the SMEs companies into the risk of business failure (Beck & Demirguc-Kunt, 2006).

The Strategic Issues that appeared in SME Management are as mention below.

·         Employing expert and practical persons of Small and Medium-Sized Enterprises (SMEs)

“Small and Medium-Sized Enterprises (SMEs)” have a strategic issue in employing expert and practical persons to be their staff. These categories of persons consider that “Small and Medium-Sized Enterprises (SMEs)”  carriage a bigger threat rather than an existing well-known bigger company. Therefore, Small and Medium-Sized Enterprises (SMEs) companies have to be able to strive with bigger companies without neglected the deference to recompense, welfares and advancement occasions. Some of the “Small and Medium-Sized Enterprises (SMEs)” companies declared that to get success in employing expert and practical persons claimed to be difficult for them. The reason behind it is that “Small and Medium-Sized Enterprises (SMEs)” companies do not gain the assets to acquire various training series like the large companies do (Walsh & Lipinsk, 2009).

·         Carrying and realizing the business vision of Small and Medium-Sized Enterprises (SMEs)

“Small and Medium-Sized Enterprises (SMEs)” companies seem to have an issue in carrying and realizing their business vision. Even though the companies said that they have no difficulties in communicating the vision of the company with their employees, but still, the fact that most of “Small and Medium-Sized Enterprises (SMEs)” companies seem to unable in carrying and realizing their business vision if compared with the bigger companies in the same field.

  Customer relations service of Small and Medium-Sized Enterprises (SMEs)

The fact that “Small and Medium-Sized Enterprises (SMEs)” companies are unable to employ expert staff for the business lead the companies to have the strategic issue regarding customer relations service. The staff that considered to be not expert will not have the proper knowledge and capability to perform a good customer service, and they are unable to keep good relations with the customers as well (Decker, Schiefer, & Bulander, 2006).

·         The rules from Government of Small and Medium-Sized Enterprises (SMEs)

Another strategic issue that “Small and Medium-Sized Enterprises (SMEs)” companies have to face is the rules from the government in the system of taxes, tariffs, and techniques. The executives in Small and Medium-Sized Enterprises (SMEs) companies feel that the rules from the government have turn out to be excessively burdensome. This is due to “Small and Medium-Sized Enterprises (SMEs)”  companies have a limited financial budget to bear with high costs from tariffs, taxes, and also techniques that the government has created (Ahmad, Ebrahimi, & Abtahi., 2013).

·         Extend the business of Small and Medium-Sized Enterprises (SMEs)

 Extend the business is indeed has become one of the strategic issues in “Small and Medium-Sized Enterprises (SMEs)” companies. Lack of expert with lack of knowledge and limited financial budget has caused the companies to be unable to extending their business. In fact, “Small and Medium-Sized Enterprises (SMEs)” companies even have to face the difficulties to exist in the business as well.

The reality is that “Small and Medium-Sized Enterprises (SMEs)”  companies have to face a number of main issues and challenges which hold back their development and also stops the companies from opposing positively with huge and bigger companies. For that reason, it is quite essential to recognize alternative routes to develop their business.

·         Acquisitions of Small and Medium-Sized Enterprises (SMEs)

Acquisitions are one of the alternative routes that “Small and Medium-Sized Enterprises (SMEs)” companies could take to survive in the business. Mergers and Acquisitions, both are dealing with the obtaining of a company by another one, along with the alliance, arrangement or assembly of two companies. The acquisition is principally measured as a large business development tactic that has the possessions to purchase other firms (Moore & Manring, 2009). As an alternative route, acquisitions offer some benefits such as:

The acquisition supports “Small and Medium-Sized Enterprises (SMEs)” companies in lock up a bigger marketplace stake and extra income

Acquisition empowers “Small and Medium-Sized Enterprises (SMEs)” companies to create a main situation in the marketplace which made conceivable through marketplace alliance.

The acquisition enables “Small and Medium-Sized Enterprises (SMEs)” companies to breakdown geographic and also governmental limits, and take their actions worldwide.

Market expansion of Small and Medium-Sized Enterprises (SMEs)

Market expansion is another alternative route which is appropriate to “Small and Medium-Sized Enterprises (SMEs)”, specifically the companies that are facing difficulties in ruling concrete stability in the existing marketplace. As this includes access to an exclusive new marketplace, marketplace exploration must be made properly by the companies, and the companies must increase further than acceptable knowledge of the different marketplace and the consumer within it. To be noted, what might drive in the existing marketplace might not gain similar outcomes in the further marketplace. This is due to characteristic alterations in culture along with other aspects as well (Jenkins, 2009).

Product development of Small and Medium-Sized Enterprises (SMEs)

Product development has the exact definition of what the phrase suggests. Here is no different marketplace, instead, there is a fresh and different product, and that product would be presented throughout the current marketplace to get a better stake in marketplace (Armario, Ruiz, & Armario, 2008). “Small and Medium-Sized Enterprises (SMEs)” companies could apply this alternative route with certain practices such as

 Increasing product route through rising and presenting fresh and different products

 Implementing new and innovative elements to the current products

Modernizing features and structures and of products

·         Encouraging partnership of Small and Medium-Sized Enterprises (SMEs)

“Small and Medium-Sized Enterprises (SMEs)” companies could get advantage impressively from the partnership. Notwithstanding commencing the constancy of recognizing that there are companies or parties which will back your company, the partnership will also support Small and Medium-Sized Enterprises (SMEs) companies to limit the costs, rise productivities and, in the end, help the companies to grow.

“Small and Medium-Sized Enterprises (SMEs)” area has considered as taking smaller amount committed preparation sections and financial plan, lesser stages of work-based teaching facility, lesser amounts of capable workers, and also a minus contribution in management teaching systems. Further, “Small and Medium-Sized Enterprises (SMEs)”  are limited in technical and administrative knowledge because of their poor fiscal assets. These aspects distinguished the deficiency of administration talents and preparation delivered inside the “Small and Medium-Sized Enterprises (SMEs)”  area. Therefore, acceptable teaching would not happen inside the “Small and Medium-Sized Enterprises (SMEs)” area deprived of outside interference.

Furthermore, the current indication is considered as unconvincing and inconsistent initiate that proper preparation claimed to be more expressively related with improved business presentation than casual preparation. The study mentioned that casual preparation is further reliable through the characteristic short-term tactical alignment of the “Small and Medium-Sized Enterprises (SMEs)”  and also consider as essentially flexible as well. In “Small and Medium-Sized Enterprises (SMEs)” companies, there is a connection between casual knowledge and business presentation due to it is guaranteed with the average tactic where the workers take on their responsibilities. Driven by the necessity on behalf of further indication, specifically in the connection in the middle of the gratification “Small and Medium-Sized Enterprises (SMEs)” companies, they have direct their workers’ preparation requirements to encountered by a variety of “Different Training Methods (TMs and the influence that the preparation has made on the presentation of their business in efficiency and also effectiveness (Storey, 2006).

The financial aspects of business expansion in Small and Medium-Sized Enterprises (SMEs)

Finance defined as a business purpose that usages statistics and systematic implements to support the managers or executives to make greater conclusions. Finance supports the organization to get a strong appreciative of the corporation’s existing financial situation, for the most part, whether the company is considered to be profitable or unprofitable (Franco & Haase, 2010). Financial aspects of business expansion in “Small and Medium-Sized Enterprises (SMEs)” are explained below.

·         Calculating and Scheduling of Small and Medium-Sized Enterprises (SMEs)

In the period of the scheduling progress, the organization defines statistical objectives for the future months, years, or more. The management in the company then will figure out the movements which must be engaged, along with the timeframe, meant for the objectives to be extended.

·         Accounting and Calculating Outcomes of Small and Medium-Sized Enterprises (SMEs)

Accounting is considered as the subdivision of finance which in charge of recording monetary statistics and producing financial reports which present the company’s functioning outcomes, and also present further serious purposes like tax acquiescence. Accounting contains the fixed of procedures and principles for the recording of monetary statistics and the performance of outcomes, named with “Generally Accepted Accounting Principles, or GAAP.” Severe obedience through the principles lets the management of the company to be guaranteed that the reports they accept are comprehensive and correct.

·         Observing the Condition of Cash of Small and Medium-Sized Enterprises (SMEs)

All companies, mainly the smaller ones like “Small and Medium-Sized Enterprises (SMEs)” who never have huge cash assets or deriving volume, should continuously pay attention to the condition of their cash, especially on the influxes and leakages of cash. The finance section is responsible for calculating cash movement to avoid possibly disrupting deficiencies of cash. Incidents.

·         Examination for Making Decision of Small and Medium-Sized Enterprises (SMEs)

Finance could also be considered as a toolbox for the management of the company to utilize. This tool supports the company to reply to queries that the organization should conduct in the process of making slight and big decisions. The aim of the statistics assembly and from time to time difficult financial forming used in finance is to make sure that the company creates the greatest well-organized usage of its limited assets, as well as the money, human resources, and dynamic capability.

In “Small and Medium-Sized Enterprises (SMEs)” companies, the highest obstacle to the expansion and development processes is on how to make over the mentality of the owners or investors, and also to produce an attentiveness of the worth of discovering possibly advantageous occasions for the companies. To overwhelm these obstacles, the executives and managers must conduct interior calculations to influence their investors that their investments or asset is associated with the business approach of the companies. The changes and development process in “Small and Medium-Sized Enterprises (SMEs)” companies are mostly motivating companies to achieve, at the same time along with diverse scopes such as project and product development, industrial, delivery, communication, and also advertising. Most important difficulties which appear in “Small and Medium-Sized Enterprises (SMEs)”  companies in development processes are connected with the lack of knowledge, product scheme and the competency of development, preparation arrangement and also interacting. “Small and Medium-Sized Enterprises (SMEs)” companies also seem not succeeding in several inclusive outlines for developing their tactics and measuring their effectiveness as well (Zhou, 2016).

“Small and Medium-Sized Enterprises (SMEs)” indeed need to struggle to improve their weaknesses and convert them into strength. The findings have explained that there are various contemporary issues that occur in “Small and Medium-Sized Enterprises (SMEs)” as well as the strategic issues also appear and need to be faced by the companies which categorized in “Small and Medium-Sized Enterprises (SMEs)”. With a lack of capability, it is considered to be difficult for “Small and Medium-Sized Enterprises (SMEs)” to survive in the business. However, there are also some alternative routes that the companies could perform to recover and improve their business performance. “Small and Medium-Sized Enterprises (SMEs)” conduct diverse business development methods if compared with bigger scale companies. This is due to the fact that the companies need to adjust their objectives along with their capabilities as well. “Small and Medium-Sized Enterprises (SMEs)”  also need to figure out the financial aspects of business expansion if companies want to achieve their objectives successfully. The development processes that “Small and Medium-Sized Enterprises (SMEs)” also perform quite different from larger companies have done. This is associated with the fact of lack of knowledge, product scheme and the competency of development, preparation arrangement and also interacting in the companies as well. However, if “Small and Medium-Sized Enterprises (SMEs)”  companies are able to realize the development process, they will able to gain success and extend their business to encounter in the business competition with similar companies or even the larger scale companies.