Study On The Capital Management Strategy Of Small And Medium Enterprises

Since the reform and opening, SMEs in China have flexible operation mechanismand strong ability to adapt to the market. They are indispensable in China’s economicdevelopment. To the present, SMEs provide employment opportunities, fulfill theirsocial obligations, meet customer demand, promote technological innovations, deepenthe market economy, and push rapid economic growth. They are important force forthe country’s economic growth and social stability. But, the surviving and have a firmfoothold SMEs now only representatives numerous failures of SMEs. Most of thefinancing capacity of SMEs are insufficient funds in short supply, investment blind tothe effect, or corporate financial control factors such as poor management of fundsand had to withdraw from the competition market. This article refers extensivelydomestic and international fund management experience, learn from academia fundsmanagement theory and methods to SMEs. Research the use of funds, the cost offunding and capital allocation, utilization and control of capital management strategyand money management evaluation methods for SMEs in the country. For SMEs inthe operation and management of the financial aspects of the problem encounteredsuggestions for improvement, in order to help in the daily operations of SMEs toeffectively prevent risks, improve the competitiveness of enterprises.The main contents of this paper are organized as follows. Firstly, a briefintroduction of the research background and significance research papers, researchframeworks and research methods are applied to the study of this paper. Secondly,research on the fund management theory. Thirdly, analyzes the SMEs capitalmanagement systematically. Analyze SMEs capital management life cycle stages ofmoney management features and internal and external environment from theperspective. Clear SMEs’ capital management objectives. After research on SMEsfinancing strategy, the use of modern capital structure theory, the SMsE financingsituation and cause analysis, combined with the mode of financing of SMEs, presentsthe different stages in the development of SMEs should take appropriate financingstrategy, and the optimal capital structure of SMEs in China were analyzed todetermine. Then, research on the investment strategy of SMEs. SMEs in China in the right situation and the causes of investment research based on the analysis of the SMEinvestment principles. Then, research on the cost of funding for SMEs control andrevenue allocation strategy. After that, do the empirical research based on the moneymanagement strategy for SMEs. Finally, draw the conclusion.Capital management relates to the management objectives, finance management,investment management, and distribution of benefits management. But the traditionalChinese SMEs and enterprises have different characteristics. If policy-makers fromSMEs perspective, policy makers should provide SMEs create a favorable externalenvironment, strengthen the management of the business environment to continue tostrengthen policy support efforts. Enhance the ability of external financing for SMEs.Strengthen the government’s external oversight function. And conversely, as the SMEowners and managers, you can not only rely on government support, but should focuson enhancing their operational capacity, the introduction of modern enterprise system,standardized operation and management. Specifically, should improve their internalorganizational structure, based on the full use of the budget funds management andmonitoring functions, improve the financial system to attract a high level of financialtalent Build efficient financial supervision system, improve financial control, improvecapital utilization efficiency. Strengthen corporate accounting information collectionand analytical skills. Cautious investment, try not to be blind expansion ordiversification of operations. SMEs should improve the level of financial managementconstantly. Play a key role to the enterprise fund management in the growth process.