Essay: Interpretation of SMEs

Sample Essay

The companies and organisations which have a small capital structure and which operate on a lower scale with a minimum number of employees and earning low profits are termed as Small and Medium Enterprises – SMEs. The interpretation of SMES based on size and structure varies from country to country and author to author.

The size of SMES is based on different variables such as operating levels, number of employees, amount of investment and level of profits in different parts of the world. Countries in the United Kingdom which employ less than 50 workers and do no operate as subsidies of other corporations are termed as SMEs.  The important aspects to consider while defining and classifying SMEs should be both qualitative and quantitative. The quantitative factors to consider include the number of employees, amount of capital invested, turnover and annual profit or losses of the company. The qualitative aspects on the other hand include the overall objectives, policies and procedures implemented in an organisation (Romm and Sudweeks 1998).

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