Understanding Small and Medium-sized Enterprises (SMEs)
This glossary page provides a comprehensive definition of Small and Medium-sized enterprises (SMEs) and related terms.
SME Definition
SMEs are businesses that have a limited number of employees and a relatively low turnover. The definition of SMEs varies by country, but generally, they are defined as businesses with fewer than 250 employees and an annual turnover of less than €50 million. SMEs are considered the backbone of the economy, as they account for a significant portion of employment and economic growth.
Micro-enterprises
Micro-enterprises are the smallest type of SMEs, with fewer than 10 employees and an annual turnover of less than €2 million. They are often run by a single person or a small team and are typically focused on a specific niche market.
Small Enterprises
Small enterprises are slightly larger than micro-enterprises, with between 10 and 50 employees and an annual turnover of less than €10 million. They are often more established than micro-enterprises and may have a broader customer base.
Medium-sized Enterprises
Medium-sized enterprises are the largest type of SMEs, with between 50 and 250 employees and an annual turnover of less than €50 million. They are often more complex than small enterprises and may have multiple locations or business units.
Benefits of SMEs
SMEs play a crucial role in the economy, providing employment opportunities and driving innovation. They are often more agile and adaptable than larger businesses, allowing them to respond quickly to changes in the market. Additionally, SMEs can provide a more personalized service to customers, which can be a competitive advantage.
Challenges of SMEs
Despite their importance, SMEs face a number of challenges, including limited access to funding, regulatory burdens, and difficulty competing with larger businesses. However, many governments and organizations offer support and resources to help SMEs overcome these challenges and thrive.
