When I first heard the acronym “SME” I didn’t have a clue what it stood for. However while researching what is SME , not only did I find out the answer to define SME but also some information about the importance and relationships of SMEs with banks and the global economy.
An SME stands for “Small to Medium Enterprise”, and there are various parameters to measure an SME for example to European Commission brakes down SMEs even further into small-medium, small and micro. For example to be classed as a Micro SME you would need less than 10 employees, a turnover of less than £2million or a balance sheet total of less than £2million.
The world bank has carried out research into SMEs to see if they can gage the importance of them to a nation’s economy. Their research found that in countries such as Belarus or Azerbaijan SMEs accounted for 5% of the GDP whereas countries such as Greece, Chile and Thailand this figure was over the 80% mark.
To find out more about SMEs and their relationship with the economy go to : http://www.radar-global.com/blog/what-are-smes-and-msmes
Quite informative article with inputs on the need for planning in case of life exigencies or business exigencies. Most Entrepreneurs fail because although they have the business plans for the next 5-7 years with all financial analysis and break-even calculations, but do not have the fine prints in case plan A , B , C fails due to either internal or external factors and the business witnesses a downturn. The best way to overcome these challenges is by identifying the Risks and diversifying these Risks and taking adequate preventive measures for Risk coverage.