The study aims to analyze and prove the factors influencing business strategy to improve Small and Medium Enterprises (SMEs) performance in Pandes Village, Klaten. The data was obtained by distributing questionnaires to SME owners. The sampling technique applied is simple random sampling. The number of samples was calculated using the Roscoe reference. The analysis technique uses SEM-PLS.The study found that financial strategy, human resources management, marketing, and research and development (R&D) have significant effects on SMEs. Effective financial management, efficient HR processes, strategic marketing, and substantial investment in R&D are crucial factors that contribute to the success of SMEs. Nevertheless, the study indicates that the production techniques SMEs use have little impact on their overall firm performance, suggesting that parts of the manufacturing process may not have significant importance. The lack of substantial influence from the production strategy underscores the need to examine production-related decisions and actions. Prioritizing these variables can improve SME firm performance. This nuanced understanding has the potential to impact future research and practical actions aimed at enhancing the performance of small and medium-sized enterprises (SMEs) in a more targeted manner. Emphasizing a rural environment in Indonesia, in contrast to metropolitan or global settings, provides a distinct framework. SMEs in rural areas may encounter different challenges and opportunities than their urban counterparts. Additionally, the comprehensive strategy integrating financial, production, human resources, research and development, and marketing viewpoints enhances the study’s uniqueness by thoroughly understanding SMEs in the village.

Link: Strategies to Enhance Business Performance: Evidence from Small and Medium Enterprise