Approach to Assess and Select Small and Medium Enterprises (SMEs) for Incubation on the Base of Angel Model – a Case on Developing Economies and ENGINE Program

Abstract

One key strategy to achieve economic development is to grow the Small and Medium Enterprises (SMEs) sector of the economy. Small and Medium Enterprises (SMEs) scalability (growth or expansion) have become an area of concern for economic growth in developing economies. In view of this many researchers have attempted to come up with some of the indicators that can be used to determine SMEs success. This research literatures reviewed on small and medium enterprises (SMEs) revealed that all SMEs go through different stages of growth, commonly termed as life cycles. Also, a careful study of business theories and common approaches used by institutions to select SMEs for incubation has well established that many factors contribute to SMEs success. The critical question is, “do Business Plan and or other business documents contain all the factors that determine SMEs success?”  This study through the use of the Project Angel Model and the Chaos Theory [1,2] has conducted a careful study into what determines SMEs success and found that no single business document can be used as a perfect gauge of SMEs success.  Further, this study has developed SMEs Success Prediction Model and SMEs Business – Project Success Rater to help gauge SME success. This study also summarizes the many determinants of enterprise growth and classifies them into ten (10) dimensions. The study also proves that individual competencies such as SME owners’ innovativeness, technical knowledge, growth motivation and many more contributes to SMEs success, and enterprise’s scalability (its preparedness to grow) is found to have a positive impact on a firm’s success but not a business plan.