SMEs and Potential...

Everything starts from something. A tree starts from a seed. A child comes from a womb and thus a business comes from an ideal. Some businesses with huge ideal supported with small capital and resulted slow momentum and movement. Some other businesses started with minute ideal but huge capital and resulted with the big impact to the market. In business, ideal and capital are complementing each other, missing either one of them will lead to the failure of the business. Capital is a subset of the financing in which the relationship between financing and business is very strong and the missing either of them will collapse the whole structure of the institution.

Small Medium Enterprise is a category of business institution which small in term of operation, structure, capital and human resources. Moha and Siti (2007) (Adequacy of Financial Facilities for Small Businesses in Malaysia : Preliminary Findings) highlighted that Manuh, 1989 has observed that there are 55 types of different definitions being used in 75 countries all over the world. For the purpose of this write up, the definition of the SME is to include the establishment with the turnover of not more than RM25 million per year and the number of the full time staffs of not more than 150 employees in any point of time.

These SME organizations are huge in numbers which in 2005 there were 98.8% out of total business establishments were under this category. In term of production/GDP and employment, SMEs has contributed as much as 19.7% out of total Gross Domestic Production and 33.9% of total country’s employment in the same year. This figure shows that SMEs have an important role in generating and circulating the country’s economy even though the remaining 1.3% of the business establishments is the one which complement the big chunk of the employment rate (66.1%) and the gross domestic production (80.3%). 

The SME organization cannot be seen from a static point of view, this is due to the potential of the SME to grow and become big. There were few organizations which started as a SME at its earlier stage and currently have evolved to become a big conglomerate and multinational companies which served multi countries and multi nations for example Mitsubishi, Toyota and Secret Recipes. Therefore the same is still applying for others SME given the chances are properly grabbed and the supplies of the services and products are properly taken care.