Financial management practices in successful small and medium enterprises (SMEs)

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dc.contributor.author Wolmarans, H.P. (Hendrik Petrus)
dc.contributor.author Meintjes, Quentin
dc.date.accessioned 2016-04-26T11:41:04Z
dc.date.available 2016-04-26T11:41:04Z
dc.date.issued 2015
dc.description.abstract 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. en_ZA
dc.description.department Financial Management en_ZA
dc.description.librarian am2016 en_ZA
dc.description.uri http://www.sajesbm.co.za en_ZA
dc.identifier.citation Wolmarans, H & Meintjes, Q 2015, 'Financial management practices in successful small and medium enterprises (SMEs)', Southern African Journal of Entrepreneurship and Small Business Management, vol. 7, no. 149, pp. 88-116. en_ZA
dc.identifier.issn 1015-3977
dc.identifier.uri http://hdl.handle.net/2263/52176
dc.language.iso en en_ZA
dc.publisher University of Pretoria, Department of Business Management & Academic Entrepreneurship Society of South Africa (AcES) en_ZA
dc.rights Department of Business Management, University of Pretoria & Academic Entrepreneurship Society of South Africa (AcES) en_ZA
dc.subject Financial management practices en_ZA
dc.subject Successful SMEs en_ZA
dc.subject Entrepreneurship education en_ZA
dc.subject Small, medium and micro enterprises (SMEs) en_ZA
dc.title Financial management practices in successful small and medium enterprises (SMEs) en_ZA
dc.type Article en_ZA


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