Characterizing structural problems of SMES during their evolution: Case study of Indonesian SMES

The previous research identifies that small and medium enterprises (SMEs) move through three evolutionary stages in their development: entrepreneurial, business start-up, and on-going (Schutjens & Stam, 2003). This research explores the structural problems (financial, marketing, and human resource) at each stage. The interview results of ten SMEs in the Greater Jakarta area were analyzed using qualitative content analysis. The findings show SMEs in the initial stage face relatively simple problems; however, many suffer failure from inadequate financing. At the start-up stage, SMEs face more complicated problems, primarily in marketing and finance. The SMEs that survive these two stages and move to the on-going business stage have better access to financing, but experience problems common to established firms. Given the importance of SMEs to economies, this research is important for SMEs and also regulators, and those who have concern on job creation and economic growth.