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What is the full form of SME?

By Anushree Goswami Last updated : April 20, 2024

SME is an abbreviation of Small and Medium Enterprises. They are also known as small and medium-sized businesses (SMBs).

The small and medium enterprises have a definite number of employees and staff and the investment in the plant and equipment expenditure comes within a certain limit of the total sum. Small and Medium Enterprises play an extremely significant responsibility in the expansion of any country and advancement of that country's industrial economy. They also encourage and inspire people for dynamic innovation and competition in many economic segments. The acronym "SME" is used by global organizations such as the World Bank, the European Union, the United Nations and the World Trade Organization (WTO).

Image source: https://realkm.com/2016/04/19/knowledge-management-in-small-and-medium-enterprises-a-structured-literature-review/

• SMEs are significant for financially cost-effective and social reasons, specified the segment's responsibility in employment.
• SME's are greatly and profoundly influenced by their Chief Executive Officers due to their sizes.
• The CEOs of SMEs frequently are the founders, owners, and managers of SMEs.
• The responsibilities of the CEO in SME are complicated and reflect those of the CEO of a huge corporation: the CEO requires to strategically assign her/his time, energy, and possessions to administer the SMEs. In general, the CEO is the strategist, champion and leader for advancing and growing the SME or the most significant basis for the business failing.

Employees and Annual Revenue

• The employees and annual revenue of small and medium-sized enterprises differ according to the different countries.
• In India, under section 7 of the Micro, Small and Medium Enterprises Development (MSMED) Act 2006, the Indian government states the size of micro, small and medium enterprises.

In Case of Manufacturing Enterprises

• Micro Enterprises: Investment in the plant and equipment doesn't go beyond 25 lakh rupees.
• Small Enterprises: Investment in the plant and equipment is higher than 25 lakh rupees but does not go beyond 5 crore rupees.
• Medium Enterprises: Investment in the plant and equipment is higher than 5 crore rupees but does not go beyond 10 crore rupees.

In Case of Service Enterprises

• Micro Enterprises: Investment in machines and gears does not go beyond 10 lakh rupees.
• Small Enterprises: Investment in machines and gears is higher than 10 Lakh rupees but does not go beyond 2 crore rupees.
• Medium Enterprises: Investment in machines and gears is higher than 2 crore rupees but does not go beyond 5 crore rupees.