This research develops an innovation quality evaluation model, which consists of three facets-product/service innovation, process innovation, and business innovation, and investigates the small and medium-sized service companies. Through factor analysis, it is found out that the critical factors for the business innovation are evaluation capability and management commitment, and for the process innovation and product innovation the critical factors are management system and innovative process; research inputs, business information, and purchasing incentives correspondingly. This research also justifies that all these factors have positive yet different scale of impact on the business performance.