Scholars in entrepreneurship studies have found the vital role of innovation practices towards the performance of businesses. Innovation is often associated with an increase in the performance of a business. However, the question arises is what are the types of innovation that can significantly affect business performance. In this regard, the study aims to examine the current position of business performance and innovation practices among micro-sized enterprises. In addition, this quantitative study also seeks to establish the relationship between the three multidimensional constructs of innovation (including product innovation, process innovation and technological innovation) with business performance. The data collection process was carried out through surveys that involved a sample of 127 micro-sized enterprises in Perlis. Descriptive analysis showed that the current situation of business performance and all types of innovation were at a high level of practices. The result from correlation analysis further revealed that product innovation, process innovation, and technological innovation have a significant and positive relationship with the improvement in business performance. It provides knowledge on the importance of the practice of all three types of innovation in business enterprises. The implications and future directions of this study are also discussed.
