Small and medium-sized enterprises (SMEs) are businesses with fewer employees, less revenue, and fewer assets than large businesses. The exact definition of an SME varies from country to country, but in general, SMEs are defined as businesses with fewer than 250 employees and less than $50 million in annual turnover.
SMEs play an important role in the global economy. They account for the majority of businesses and employ more than half of the workforce worldwide. SMEs are also major drivers of innovation and economic growth.
Some of the key characteristics of SMEs include:
- Agility: SMEs are often more agile than large businesses, which means they can adapt to changing market conditions more quickly.
- Flexibility: SMEs are also more flexible than large businesses, which means they can offer more customized products and services to their customers.
- Innovation: SMEs are often at the forefront of innovation, as they are not bound by the same bureaucratic red tape as large businesses.
- Entrepreneurial spirit: SMEs are typically owned and operated by entrepreneurs, who are passionate about their businesses and driven to succeed.
SMEs can be found in almost every industry, but they are more common in industries that require fewer employees and less upfront capital investment. Some examples of industries that are dominated by SMEs include:
- Retail
- Hospitality
- Construction
- Professional services
- Manufacturing
SMEs face a number of challenges, including:
- Access to finance: SMEs often have difficulty accessing finance from traditional banks.
- Competition: SMEs often face competition from larger, more established businesses.
- Regulation: SMEs can be burdened by complex and time-consuming regulations.
Despite these challenges, SMEs play a vital role in the global economy. They are the backbone of many communities and provide jobs and opportunities to millions of people around the world. For more information about SMEs, take a look at some of our related articles below.
