Small And Medium-Sized Enterprises (Smes)

Small And Medium-Sized Enterprises (Smes)

Small and medium-sized enterprises (SMEs) are businesses that employ fewer than 500 people. They are the backbone of the European economy, accounting for more than 99% of all businesses in the EU.

SMEs come in all shapes and sizes, from micro businesses with just a handful of employees, to small firms with up to 249 employees, and medium-sized companies with 250-499 employees.

There is no single definition of an SME, but the European Commission uses three criteria:

•The number of employees;

•tThe turnover or balance sheet total;

•tThe ownership structure.

SMEs are typically more flexible and agile than larger businesses, and they are often better able to respond to market trends and adapt to change. They also tend to be more innovative, and many of the world’s most successful companies started out as SMEs.

In recent years, the growth of SMEs has been hampered by a number of factors, including the global economic downturn, rising costs (such as energy and raw materials), competition from larger businesses, and access to finance. Nevertheless, SMEs continue to play a vital role in Europe’s economy.