SME - suniladhya/Advantage GitHub Wiki
SME (small-to-medium enterprise) is a convenient term for segmenting businesses and other organizations that are somewhere between the "small office-home office" ( SOHO ) size and the larger enterprise . The European Union has defined an SME as a legally independent company with no more than 500 employees.
SMEs Have a Dominant Share of the Global Economy
Small to medium enterprises (SMEs) make up the vast majority of businesses in most countries.
- Legal offices
- Fitness and recreation centers
- General freight trucking, local
- Dentists offices
- All other specialty trade contractors
- Landscaping services
- Snack and nonalcoholic beverage bars
- Veterinary services
- Other personal care services
- Drinking places (alcoholic beverages)
- All other personal services
- Physicians offices
- Hotels (except casino hotels) and motels
- Engineering services
- Limited-service restaurants
- Beauty salons
- Child day care services
- Beer, wine and liquor stores
- Single family housing construction
- Full-service restaurants
According to U.S. Census Bureau Data from 2016, of the 5.6 million employer firms in the U.S.:
● 99.7 percent had fewer than 500 employees
● 98.2 percent had fewer than 100 employees
● 89.0 percent had fewer than 20 employees
SEMs contributed 46 percent of the private nonfarm GDP in 2008 (the most recent year for which the source data are available), making them hugely important for economic growth, innovation, and diversity.
Because of their contribution to the economy and their generally greater difficulty in obtaining financing and their higher fixed cost of taxation and regulatory compliance, SMEs are often given incentives and more favorable tax treatment. Depending on the country, governments may use a range of policies to encourage the growth of SMEs.
SMEs Dominated Industries
Unsurprisingly, most SMEs reside in industries that don't require large initial capital investments. Based on 2016 U.S. Small Business Administration (SBA) loan approval rates, the fastest-growing SMEs are:
U.S. SME Definition
In the U.S., the definition of an SME varies by industry, based on the North American Industry Classification System (NAICS). NAICS is a system developed by the U.S., Canada, and Mexico to standardize and facilitate the collection and analysis of business statistics.
The U.S. Small Business Administration (SBA) provides a list of small business size standards matched to the NAICS codes. To be considered a small business and be eligible to apply for government contracts and targeted funding, a business must be within the defined limits in terms of a number of employees or revenue.
In manufacturing, for example, an SME is defined as having 500 employees or less, whereas in wholesale trades it is typically 100 employees or less. Ranges within sectors can vary quite a bit. For instance, in sector 21, Mining, Quarrying and Oil and Gas Extraction, a business involved in Copper Ore and Nickel Ore Mining can have up to 1,500 employees and still be considered an SME while a business involved in Silver Ore Mining can only have up to 250 employees.