Citation:

Raihan Dikara, Subiakto Soekarno. "Proposed Improvement Plan to Improve Small and Medium Enterprise Financial Performance: A Case Study of Orbit" International Research Journal of Economics and Management Studies, Vol. 3, No. 10, pp. 248-258, 2024.

Abstract:

This thesis is a complete analysis and proposed improvement plan for Orbit, an interior design company established in 2020 in Bandung, West Java, Indonesia. Being a small and medium enterprise, Orbit faces tremendous challenges in financial management, operational efficiency, and competition in the market. The primary goal of this research is to determine exactly what financial management practices caused the problems that Orbit currently faces and then propose suggestions for its optimal improvement in terms of financial performance. This research applies the internal and external analysis framework through Resource-Based View (RBV), VRIO Analysis, PESTEL Analysis, Porter’s Five Forces, and SWOT Analysis in order to see in detail the situation at present of Orbit. Financial performance is measured with the help of liquidity, activity, debt, and profitability ratios, whereas non-financial performance is measured with the help of marketing, human resources, governance, and operational indicators. Important findings are that Orbit faces problems in managing its cash flow. The high accounts receivable and ineffective collection processes are the primary causes of such a scenario. Economic fluctuations also adversely affect its operational efficiency and financial stability. The proposed improvement plan suggests more stringent credit policies, better collection processes, and clear budgeting limits. It also suggests expanding market reach by targeting new segments and forming strategic partnerships. Strengthening brand and marketing efforts through showcasing unique design capabilities and maintaining strong client relationships is essential for sustained growth.

References:

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Keywords:

Financial Performance, Small and Medium Enterprises, SME Performance.