Does Everyone Have the Same Definition of an SME?
There are various definitions of an SME (Small and medium-sized enterprises) based on a variety of factors. Since there are different definitions, knowing if your business falls within a certain SME category can be a challenge.
Whether it’s a person, business, or government, the definition of SME can change. This complicates things because you never truly know what your business is without a true definition.
Knowing the various definitions based on the institutions or countries you’re dealing with can help.
Here are how some countries define SME:
- UK: The UK government classifies an SME as an organisation with under 250 employees and a balance sheet of less than €50 m. A small business has less than 50 employees with a balance sheet of less than €10 million.
- EU: The EU usually defines a small business as one that has no more than 50 employees and has a balance sheet under €10 m. A medium-sized business is one that employs less than 250 people and has a balance sheet of less than €43 m.
- US: The US definition changes from industry to industry. Generally, an SME has less than 500 employees and a balance sheet of less than $7.5 m.
- AU: Australia has two definitions. A small business is one with less than 20 employees, while a medium-sized company has less than 200.
Do you see why it’s so difficult to define what an SME truly is? The meaning can be based on where you are, your balance sheet, or the industry you’re in.
But since you’re in the UK, it’s best to stick with what the UK government defines an SME as (fewer than 250 employees and less than €10 m).
If your business has less than 10 employees and a balance sheet of less than €2 million, you would be considered a micro business. These are fast becoming one of the most reported enterprises in the UK.
Wherever your business fits in, comparing energy prices is one of the best things you can do to lower your monthly spending. Speak with one of our Business Energy Comparison consultants to see how we can reduce your monthly energy bills.