Financial Guide for SMEs - SME Corporation Malaysia

Financial Guide for SMEsIntroductionSmall and medium enterprises (SMEs) are often driven by the passion toachieve the owners’ desired outcomes. They may want to see a business growfrom the start, be keen to enter into an industry that provides great challenge,or be motivated by personal reasons such as wanting to turn a hobby into abusiness or develop a long-term retirement plan. Whatever their reasons, manySME owners do not have formal fi nancial management training (that is they arenot an accountant or bookkeeper) and usually have limited resources to pay forsuch services.For the success of any business, good fi nancial management is necessary.Good fi nancial management will go a long way to ensure that all the availablebusiness resources are used effi ciently and effectively to provide optimumreturn.This Guide has been designed to help SMEs to develop the fi nancialmanagement skills that are essential for business success. Presented in easyto-understandlanguage, this Guide discusses the key fi nancial aspects thatSMEs should focus on to ensure that good fi nancial management is in place.The areas discussed in the Guide address the fi nancial aspects that a businessshould consider and understand as part of good fi nancial management. Ifthese practices are implemented early, the business would benefi t from strongfi nancial management and the owner would be equipped with the fi nancial toolsto operate and grow a successful business.It should be noted that some of the areas may not be relevant for allbusinesses. For instance, if you are providing a service, discussion on inventorymanagement will not be relevant. Also, you have to keep in mind the typeof industry that you are in when considering good fi nancial management. Forexample, if you run a café, you would probably be reviewing inventory levelsevery week; however, a small retail toy shop may only do an inventory countonce a year.This Guide has fi ve sections, each with a number of chapters to furtherelaborate on the key topics. There are hints and tips along the way to help youfocus on the important messages and these are summarised in the Appendixfor easy reference.5chapter 1 01-21 Eng.indd 58/15/11 5:01:22 PM