Wednesday, April 24, 2024

What is a SME?

SME stands for Small and Medium Entreprises. In the UK, this means a company with less than 250 employees. The EU distinguishes between micro, small and medium companies according to their headcount and a measure of their economical weight. Often (but not systematically) the size and commercial reach of a business converge.

Focusing on the headcount and turnover*, the official EU definition is as follows:

  • micro: less than 10 employees and ≤ 2M euros turnover
  • small: less than 50 employees and ≤ 10M euros turnover
  • medium: less than 250 employees and ≤ 50M euros turnover

On this site, I will keep my focus on a company’s headcount. For the readers interested in working in an SME, this will usually be the most relevant parameter to introduce a business. Questions about their financial health are better addressed in face to face conversations.

Now that SMEs are defined, let us examine why we should bother with them at all.

* The turnover is the amount of business that a company does in a period of time, usually one financial year. The other EU scale measure is the balance sheet, which is a financial statement that provides a snapshot of the situation of a company at a given date.

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