types of smes, 7 Types of SMEs You Need to Know

types of smes

7 Types of SMEs You Need to Know About

Small and medium-sized enterprises (SMEs) are businesses that have fewer than 250 employees and a certain level of turnover or balance sheet. SMEs play a vital role in the economy, as they provide jobs, innovation, and diversity. But not all SMEs are the same. There are different types of SMEs based on their size, industry, and ownership structure. In this article, we will explore seven types of SMEs you need to know about.


These are the smallest type of SMEs, with 0-9 employees and a turnover or balance sheet of up to £2 million. Micro-businesses are often run by sole traders or partnerships, and they operate in various sectors, such as retail, personal services, or professional services. Examples of micro-businesses include hairdressers, plumbers, or consultants.

Small businesses:

These are SMEs with 10-49 employees and a turnover or balance sheet of up to £10 million. Small businesses are more likely to have a formal legal structure, such as a limited company or a limited liability partnership, and they may have more access to finance and markets than micro-businesses. Examples of small businesses include restaurants, law firms, or software companies.

Medium-sized businesses:

These are SMEs with 50-249 employees and a turnover or balance sheet of up to £50 million. Medium-sized businesses are more established and complex than small businesses, and they may have multiple locations, departments, or product lines. They may also have more international exposure and involvement in research and development. Examples of medium-sized businesses include manufacturing firms, engineering firms, or biotechnology firms.


These are small office/home office businesses, which are a subset of micro-businesses that operate from a home or a small office. SOHOs are typically self-employed individuals who offer professional or creative services, such as graphic design, web development, or accounting. SOHOs may have low overhead costs and high flexibility, but they may also face challenges such as isolation, competition, or lack of support.

Family businesses:

These are SMEs that are owned and managed by members of the same family, or where the majority of shares are held by family members. Family businesses may span across different sizes and industries, but they share some common characteristics, such as long-term vision, loyalty, trust, and succession planning. Examples of family businesses include Dyson, Clarks, or JCB.

Social enterprises:

These are SMEs that have a social or environmental mission at the core of their business model, and that reinvest their profits to further their cause. Social enterprises may operate in various sectors, such as health care, education, or recycling, and they may have different legal forms, such as charities, cooperatives, or community interest companies. Examples of social enterprises include The Big Issue, Divine Chocolate, or Cafédirect.

High-growth businesses:

These are SMEs that have a high potential for growth in terms of revenue, profit, or market share. High-growth businesses may be innovative, disruptive, or scalable, and they may attract investment from venture capitalists or angel investors. High-growth businesses may operate in emerging or fast-growing sectors, such as technology, e-commerce, or renewable energy. Examples of high-growth businesses include Deliveroo, Monzo, or Spotify.

These are just some of the types of SMEs you need to know about. Each type has its own strengths and weaknesses, opportunities and threats, and challenges and solutions. By understanding the different types of SMEs, you can better appreciate their contribution to the economy and society.

Types of SMEs and Their Global Demand

Small and medium-sized enterprises (SMEs) are businesses that have revenues, assets, or a number of employees below a certain threshold. Each country has its own definition of what constitutes an SME, and sometimes different criteria are applied across industries. SMEs play an important role in the economy, as they employ many people, foster innovation, and contribute to the gross domestic product (GDP).

According to Investopedia , common types of SMEs include legal firms, dental offices, restaurants, and bars. However, SMEs can exist in almost any industry, as long as they meet the size criteria set by the country or region. For example, in the European Union (EU), an SME is a business that has fewer than 250 employees and either a turnover of no more than €50 million or a balance sheet total of no more than €43 million . In the United States, the Small Business Administration (SBA) classifies a small business according to its ownership structure, number of employees, earnings, and industry. For instance, in manufacturing, an SME is a firm with 500 or fewer employees .

The global demand for SMEs varies depending on the industry, market conditions, consumer preferences, and other factors. Some industries may experience an increase in demand due to technological changes, environmental concerns, social trends, or regulatory developments. For example, SMEs in the renewable energy sector may benefit from the growing awareness and demand for clean and sustainable energy sources. Other industries may face a decrease in demand due to competition, disruption, obsolescence, or saturation. For example, SMEs in the traditional retail sector may struggle to compete with online platforms and e-commerce giants.

SMEs need to adapt to the changing market conditions and consumer needs in order to survive and thrive in the global economy. They need to leverage their strengths, such as flexibility, agility, creativity, and customer loyalty, and overcome their weaknesses, such as limited resources, access to finance, skills gaps, and regulatory barriers. By doing so, SMEs can create value for their customers, employees, shareholders, and society.











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