The article studies the innovative activity of small and medium-sized enterprises. The main obstacles to the
innovative development of small and medium-sized enterprises were determined. The scenarios of correspondence
between potential of innovation and potential of the enterprise, as well as the methodology of
determining the innovative potential of small and medium-sized enterprises are given. The paper describes
the algorithm and financial and legal mechanism of the innovative development of small and medium-sized
enterprises, which includes a set of goals, ideas, tasks, tools, principles and innovative development factors.
Depending on the combination of the values of the factors of five-component indicator,six levels of innovative
development of small and medium-sized enterprises are established in research
