When you have in mind the creation of a new business, it is important to keep in mind that it is a path hard to succeed, especially when you have to compete with other large companies that lead in the market.
Sometimes when talking about a small and medium business, also known as SME, it is somewhat difficult to determine exactly what the difference of each is. However, they are quite accurate and are mainly determined by the number of employees and the amount of annual turnover.
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In this article you will find:
Differences between SMEs
According to the regulations, it is considered a small company one that only has a limited number of 50 workers or less, and an annual turnover below 10 million euros.
For its part, a medium-sized company It is one that has a staff of less than 250 workers, with an annual turnover that does not exceed 50 million euros.
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According to various studies, it was shown that the percentage of small companies with respect to the medians. To calculate this number of employees and total billing, it is necessary to take into account the last closed economic record, calculated on an annual basis. In the case of total volume, VAT and indirect taxes are not taken into account.
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SME financing
When it comes to financing, it describes how the company performs the money collection with which it undertakes projects and new operations. Small businesses newer, usually have only personal financing, by staff, some loans from banks and friends or family. Once upon a time SME It is established, it is capable of contracting greater financing with external investments and other entities that can generate capital / risk.
This is one big difference that have both companies With respect to the large ones, which obtains its financing from the sale of corporate bonds and various shares to the public.
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SME market niche
Small and medium-sized companies they are generally focused on a single niche, offering unique products and services. This is usually a SME advantage, since they have a great adaptation due to their structure that is smaller compared to large companies, so they offer better, more direct and trained care.
Access to international markets
When a business is smaller it is difficult to enter other international markets. The more one grows business, this expansion in the market will be more feasible.
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Technology and research funds
The small volume they have the pymes They are not usually enough to dedicate funds to research, so in many cases they choose to form an alliance with other large companies or universities.
Labor rigidity in small and medium-sized companies
Small businesses They have greater labor rigidity, so it is essential that the staff is previously trained. The more the company grows, the lower the labor rigidity.
Small businesses tend to be less diversified, as the company grows into a medium company, it is possible to expand to offer a greater variety of services and products, and in this way increase the number of employees.
