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Small and Medium-sized Enterprises or SMEs are companies whose headcount or turnover falls below certain limits.
Apparently the abbreviation SME occurs most commonly in the EU. The term Small or Medium sized Business or SMB has become more standard elsewhere.
EU Member States traditionally had their own definition of what constitutes an SME, for example the traditional definition in Germany had a limit of 500 employees while (for example) in Belgium it could have been at 100. But nowadays the EU has started to standardise the concept. Its current definition categorises companies with fewer than 50 employees as "small", and those with fewer than 250 as "medium".
As of 2005, Germany will use the definition of the European Commission.
Business enterprises of fewer than 10 employees often class as SOHO (for Small office/home office).
In most economies, smaller enterprises predominate. In the EU, SMEs comprise approximately 99% of all firms and employ between them about 65 million people.
SMEs, in contrast to big business, have a reputation for innovation. For this reason, and because of their difficulties in attracting capital, national and regional fostering of SMEs commonly occurs.
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