Medium businesses have 100–499 employees. Small businesses have 5–99 employees. Medium and small enterprises, known as SMEs, have revenues, assets, or employees below certain levels. These enterprises might be in any industry but often exist in ones needing fewer employees and less capital at the start. SMEs are different from large, multinational firms and play a key role in the economy by employing many people and driving innovation.
Different countries have their own SME definitions, based on factors like size, industry, and sometimes ownership structure. The U.S. sees a manufacturing firm with 500 or fewer employees as an SME. In contrast, firms mining copper or nickel ore can have up to 1,500 employees and be considered SMEs. The EU defines small companies as having fewer than 50 employees, and medium ones as having fewer than 250. Nearly all businesses in the EU are SMEs. China classifies firms by revenue, employees, or assets, while countries like Kenya use the MSME term.
SMEs in developing countries account for about 50% of jobs and 40% of GDP. In the U.S., small businesses, making up over 99% of firms, contribute 43.5% to GDP and 39.7% of private payroll, creating 4.8 million more jobs from 1995 to 2020 than large businesses did.
Is a $50 million dollar company big?
A company making less than $50 million annually is small, while one earning more than $50 million but less than $1 billion is midsize. Annual revenue is a key measure for defining the SMB market.