Why does it matter whether you are a micro, small or medium sized business – and do you know which of these categories applies to you in the first place?
The Government don't appear to draw any distinction between sizes of companies with their various support packages. For example the recently launched Government Growth Voucher Scheme – see my blog post on this subject here – is aimed at Small & Medium Sized Enterprises (SME's).
The official definition of an SME is any business with up to 250 employees – with presumably businesses above this size being classified as "large".
But this definition of an SME is extraordinarily unhelpful. There is a world of difference between a company employing 5 people and one at the other end of the spectrum with over 200 employees. Designing support schemes that purport to help businesses of these vastly different sizes is fraught with problems. This extends to general confusion in the marketplace about where SME's can go for help that is appropriate for their own particular requirements.
A far more helpful classification of business would be something along these lines (using the employee numbers as a benchmark) :-
- Micro business – up to 10 employees
- Small business – 10 to 50 employees
- Medium-sized business – 50 to 250 employees
- Large business – over 250 employees
If you are running a micro-business then you are probably faced with multiple challenges including sales, marketing, financial and general organisation and prioritisation issues. You need help with all of these if you are going to grow your business.
When your business grows and your payroll reaches 10 employees or more you should find that you can start getting specific help – either from part-time employees or on a consultancy basis – to move your business further forward.
Once you are at the medium-sized level you are probably employing, full-time, a lot of these specialists. You'll have managers or directors covering all of the major disciplines listed above plus maybe a few other depending on the sector in which you operate. Your need for external support should then be limited to specialist areas on a project by project basis as everything else should be catered for in-house.
Viewpoint provide support and consultancy services to micro and small businesses – many of whom are owner-managed, but it is often difficult explaining this to business owners who constantly hear that they are classified as SME's but find, when looking for advice, that this is far too expensive, specialist and inappropriate because it is invariably aimed at the medium end of the market.
It would be helpful if the Government realised that the way they structure support schemes needs to change and be far more targeted to appropriate business groupings – and then maybe the current upturn in the economy would be even greater and more sustained than we are currently seeing.
