Abstract

This paper discusses the correlation of strategic financial leadership and business resilience among small and medium-sized enterprises (SMEs) in hard economic periods. Through mixed methods approach which involves the use of survey data of 312 SMEs in various sectors and qualitative interviews of 45 financial managers, we examine how the elements of financial strategies cash flow planning, capital structure optimization and cost efficiency measures affect the survival and performance of SMEs during economic uncertainty. We find that proactive cash flow management shows the highest positive association with the business resilience (r = 0.67, p < 0.001), then strategic cost efficiency initiatives (r = 0.54, p < 0.001) and optimized capital structure decisions (r = 0.48, p < 0.01). The COVID-19 pandemic demonstrated that SMEs with extensive financial planning systems were 3.2 times more likely to survive than the ones with reactive financial management practices. The research paper makes a contribution to the literature by offering empirical findings connecting the particular financial leadership behaviors to quantifiable resilience outcomes and also provides some practical frameworks that can guide SME managers to operate in unpredictable economic conditions. Findings show that financial literacy of leadership teams, regular scenario planning and diversified sources of funds are moderating variables that play a significant role in the relationship between financial strategy and business resilience.