What Are Small And Medium Enterprises?

What Are SMEs, SMBs and SOHO Enterprises

Small and medium enterprises (SMEs) or small and medium-sized businesses (SMBs) are companies whose personnel numbers fall below defined limits.

• A company is an association or collection of people. Company members share a common purpose in order to focus their various talents and resources to achieve specific goals.
• The abbreviation “SME” is used in the European Union (EU or European Economic Community, EEC) and by international organizations such as the World Bank, the United Nations and the World Trade Organization (WTO).

In the EU, the definition of SME is: “The category of micro, small and medium-sized enterprises is made up of enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding 50 million euro, and/or an annual balance sheet total not exceeding 43 million euro.”

There are three broad parameters which define SMEs:

• micro-entities are companies who employ up to 10 employees. Also know as Small office/home office or single office/home office (SOHO).
• Small companies employ up to 50 employees.
• Medium-sized enterprises employ up to 250 employees.

All EU companies classed as SMEs may be eligible for SME subsidy under a European-labelled programme. You can click here to download the European Union Support Programmes for SMEs (PDF) which gives and overview of the main funding opportunities available to European SMEs.

Small Enterprises Outnumber Large Companies

Small enterprises outnumber large companies by a wide margin and also employ many more people. SMEs are also said to be responsible for driving innovation and competition in many economic sectors.

In Poland for example, SMEs generate almost 50% of the GDP (2011) consisting of 29.6% from micro companies, 7.7% from small companies and 10.4% from medium companies. Other companies generated 24.0% of GDP with the remainder coming from other sources such as tax revenues. From a total of 1,784,603 companies operating in Poland 1,781,414 were classified as SMEs and employed over 6.3 million people.

The majority of information in this article was obtained from Wikipedia the free encyclopedia.