A new approach factor- entropy with application to business costs of SMEs in Shanghai

Business cost is acknowledged as one of the priorities in SMEs research. In thisstudy, the business cost of SMEs in Shanghai was primarily measured using Factor-Entropy analysis method. The purpose of this study is to effectively resolve the issueof simplification and assignment evaluation index system on business costs of SMEsin Shanghai. However, this study uses factor analysis to interpret the data onindicators, through a cross-sectional survey, considering the objective empowermentwith entropy method. It was shown that factor-entropy method to evaluation indexsystem has advantages. The samples selected involves 309 executives and managersof 16 SMEs in shanghai that are in support of the development funds of ShanghaiSMEs in China in 2013. Finally, Factor-Entropy analysis method is a combination ofsubjective and objective evaluation method, which are the indicators of the maincomponent indexes calculated entropy valves and sorting with scores. The resultsshow that the impact of the external environment (Policies and market-orientedoperation) in the Multi-target of Business-cost was significant and positive. Thevalue obtained in this study is to provide an applicable unique measurement methodto situations where the necessary information is insufficient for complex or fuzzysystems and relations, and mainly identify and evaluate information of businesscosts in small medium-sized businesses in Shanghai.