home » materials » Small and medium business is. Large, medium and small businesses

Small and medium business is. Large, medium and small businesses

Everyone knows such concepts as "small business" and "medium business". When registering a company, an entrepreneur is given a questionnaire, one of the points in which is to determine which business entity is being registered - small or medium. However, not everyone knows the differences between small and medium businesses. Today we will try to shed some light on this topic.

The concepts of medium and small business are divided on the basis of legislative acts. To classify an enterprise into one or another group, it is necessary to take into account the following factors:
Number. If the company employs 16-100 people, then it belongs to a small business, if 101-250 - to a medium one. Firms with 1-15 employees are called micro-enterprises and can also be classified as small businesses.
Income from the sale of goods or services/value of assets. These values are established by the Tax Code with a frequency of five years.

The percentage of state ownership and foreign investors (for both types of enterprises no more than 25%).

At enterprises related to small businesses, the number of employees is in the tens. Such firms have a more or less formed corporate structure and regulation of business processes.

The key to small business success is people. The main value of any small company is qualified employees, professionals who love this business and strive for one common goal. The interaction of employees is very close, and if they get mutual understanding regarding the main goal of the company, it moves forward confidently.

Small businesses include all legal entities that have an average annual number of employees of no more than 50 people.

Medium business

Speaking of medium business, we already mean a company that employs a couple of hundred people. Sometimes employees are geographically separated. In such companies, there is already a clear and regular management, which is easy to maintain due to the relatively small size of the company (compared to large business). Medium business has more resources than small business.

The main key to the success of a medium business is production and sales. In this business, any troubles and misunderstanding of each other by individual employees can hardly have a significant impact on the success of the company, so the main emphasis should be placed on the high-quality manufacture of products (or the provision of services) and the competent presentation of it to consumers.

Medium-sized businesses include all individual entrepreneurs and legal entities that have an average annual number of employees of more than 50 people.

Differences in lending to small and medium businesses

Different banks often use their own criteria to determine which business entity a particular enterprise belongs to. ie. These criteria are established on the basis of intra-bank methods of company analysis. Therefore, it may happen that when analyzing one bank, a particular company will be referred to as a small business, and another bank as a medium business.

For small businesses, there are clearer and more specific lending programs with clear names such as "business development" or "business growth". In the case of medium-sized enterprises, banks more often use an individual approach. Based on the goals and needs of a particular company, the size and terms of lending are determined.

We can say that lending to medium-sized businesses has some advantages for business owners, as an individual approach is always more convenient and profitable than a standard program with clearly defined terms.

The concept of small and medium-sized businesses has been legally established, which, in accordance with Article 4 of the Federal Law of July 24, 2007 No. 209-FZ “On the Development of Small and Medium-Sized Businesses in the Russian Federation”, includes:

duly registered citizens (as individual entrepreneurs (IP) or as heads of peasant (farmer) households (KFH);
duly registered consumer cooperatives and commercial organizations (except for state and municipal unitary enterprises).

Small and medium-sized businesses must meet three criteria.

Criterion 1. Equity participation for legal entities.

1) The total share of the Russian Federation, constituent entities of the Russian Federation, municipalities, public and religious organizations (associations), charitable and other funds should not exceed 25% in the authorized (share) capital (share fund) of legal entities.

The exception is the assets of joint-stock investment funds, closed-end investment funds and investment partnerships.

2) The share of participation in the capital of foreign legal entities, one or more legal entities that are not subjects of small and medium-sized businesses, should not exceed 49% each.

The exception is business companies (business partnerships), whose activities consist in the practical application (implementation) of the results of intellectual activity 1, the exclusive rights to which belong to the following types of founders:

budgetary, autonomous scientific institutions;
budgetary institutions, autonomous institutions, educational organizations of higher education;
legal entities, the founders (participants) of which are legal entities included in the list of legal entities approved by the Government of the Russian Federation that provide state support for innovation activities 2 subject to compliance with certain criteria.

The exception is also made by legal entities that have received the status of a project participant in accordance with the Federal Law of September 28, 2010 No. 244-FZ “On the Skolkovo Innovation Center”.

Criterion 2. According to the average number of employees.

The average number of employees for the previous calendar year should not exceed:

a) from 101 to 250 people inclusive for medium-sized enterprises;

b) up to 100 people inclusive for small enterprises, including up to 15 people for micro-enterprises;

The average number of employees of a micro-enterprise, small enterprise or medium-sized enterprise for a calendar year is determined taking into account all its employees, including employees working under civil law contracts or part-time, taking into account the actual hours worked, employees of representative offices, branches and other separate divisions.

Criterion 3. According to the proceeds from the sale of goods (works, services).

Proceeds from the sale of goods (works, services) excluding VAT or the book value of assets (residual value of fixed assets and intangible assets) for the previous calendar year should not exceed:

for micro-enterprises - 120 million rubles;
for small businesses - 800 million rubles;
for medium-sized enterprises - 2000 million rubles.

These values are subject to revision by the Government of the Russian Federation.

The category of a small or medium-sized business entity is determined in accordance with the largest of the conditions established by criterion 2 and criterion 3. For example, if an individual entrepreneur, a peasant (farmer) economy, a legal entity (JSC, CJSC, etc.) that meets the criterion 1, have an average number of employees of 15 people, and sales proceeds or book value of assets of 500 million rubles, then such an economic entity falls into the category of "medium enterprise".
Or, conversely, if the proceeds from the sale or the book value of assets of an economic entity is less than 60 million rubles, and the average number of employees is over 250 people, then such an entity does not fall under the concept of even a medium-sized enterprise, that is, it is a large enterprise.

Detailed information on the status of small and medium-sized businesses in Moscow can be obtained on the Small Business of Moscow portal.

1 Programs for electronic computers, databases, inventions, utility models, industrial designs, selection achievements, topologies of integrated circuits, production secrets (know-how).
2 In the forms established by Federal Law No. 127-FZ of August 23, 1996 “On Science and State Scientific and Technical Policy”.

Small and medium-sized businesses (SMEs) are a social, legal and economic category that includes companies and individual entrepreneurs with a small number of employees and profits. Entrepreneurship of this type responds flexibly to changes in market conditions, but needs additional support for development.

Small business is a type of entrepreneurship, which is characterized by a small number of employees (up to 100 people), average revenue (up to 800 million rubles per year), and an emphasis on equity. This is not only an economic, but also a socio-political category, whose representatives are characterized by a special worldview.

Businessmen of this type quickly adapt to new changes, have high adaptability to any working conditions. SMEs often open those facets of the market that look too risky and dangerous. Importing Chinese goods, long-lasting nail coatings, making sushi - all this was first mastered by small companies, and only then they tried to subdue big business.

There are over 6 million small businesses in the United States, each generating up to $10 million in revenue each year. These organizations employ about a third of the entire working-age population with a permanent or temporary job. It is from here that the notorious “middle class” is formed, which is the backbone of the economic well-being of the country.

RF: legislative consolidation of small business

In our country, there is Federal Law N 209 of July 24, 2007 “On the development of small and medium-sized ...”, which defines the basic principles for classifying a company in this category. There are requirements for the organizational form, the average number of employees and revenue (maximum). The maximum income that an organization can receive is subject to revision by the Government of the Russian Federation, the current Decree is valid from August 1, 2016. Information about all individual entrepreneurs and organizations belonging to this category is collected in a special Register.

The main signs of a small business

The above Federal Law lists the various requirements for which an enterprise falls into the desired category. Legal entities cannot have a total share of participation of subjects of the Russian Federation, foreign firms, religious charitable, public associations over 25%. In addition, the company cannot be owned by other companies that are not SMEs, in the amount of more than 49%.

In the 1st half of 2016, about 218,500 small businesses were created in Russia, while 242,200 companies left the market. Just a year ago, the trend was different: instead of one organization that left the market, 2 new firms appeared. Their largest number is in the Central Federal District - 1.636.987. The record holder for the number of SMEs is Moscow: 451,979 microorganizations, 170,000 entrepreneurs: comparable to the population of a small European country.

Who is the engine of small business in Russia?

Approximately every 10 able-bodied person in the Russian Federation works for himself. Moreover, the vast majority of the self-employed (about 70%) are not registered as individual entrepreneurs and operate illegally. The unwillingness to officially secure the status is associated with bureaucracy, high contributions to the Pension Fund and uncertainty about one's own future. Another factor is that people simply don't see where their money is going, which causes legal nihilism.

Small and micro businesses are based on the following areas:

Construction, repair and decoration (at least 20%);
Programming, computer repair and related industries (about 11%);
Interior design (10%);
Hairdressing and beauty services at home (6%);
Tutoring (5%).

Small business in Russia - powerless and illegal?

In the Russian Federation, about a third of the population are citizens who are of working age, are not registered as unemployed, but are not registered at any enterprises. Approximately half of these people are interrupted by odd jobs, people have been employed in organizations for years, but receive a “salary in an envelope”. This is more typical for the province, where there are no other conditions for employment and employment.

However, another 8-9 million are representatives of small "gray" businesses who work either in splendid isolation or in small teams. Let's compare this with the number of legal individual entrepreneurs - 3.7 million people - and we will get the real figure of the shadow market. After all, all the money that the self-employed help out is in the economy, but for objective reasons they cannot be invested in banks, equipment and further development of their own business.

Problems of small business in Russia

Difficult access to support, subsidies, loans, new technologies;
Administrative measures of influence on the part of state bodies (high fines for violations of the law);
Difficult competition with large organizations in certain areas (trade, production, transport);
Wrong tax policy, drawing too many resources out of the new venture.

Differences between small and medium businesses

MB - mainly self-employment or seasonal involvement of workers to perform unskilled tasks: harvesting, transportation, packaging. The company or individual entrepreneur is localized in one locality and collects a small profit. Medium business is a mandatory attraction of more personnel (both qualified and unskilled workers), investments, active investment in the development of the enterprise.

Summary

So, small business is a pioneer in those areas in which it is difficult and risky for the state and large companies to invest. People come up with original models, and although many entrepreneurs “burn out”, some businessmen earn start-up capital for further growth.

The real assistance of the state should be to create such conditions under which it will be easier for the self-employed to legalize than to work "in the gray." In other words, people just need to be left alone for a while and see what happens.

The entire set of the commercial sector in the national economy is usually divided according to different criteria. For example, generally accepted in world practice is the gradation into the official (legal) and shadow (criminal) economy, state entrepreneurship (state corporations) and the private sector, into the raw materials and manufacturing business, into material production and the service sector. One of the ways to conditionally classify entrepreneurship is its division by size - by turnover, profit, by the number of employees working at the enterprise.

Of course, this breakdown of the total mass of economic entities is always approximate, but it can be very useful for regulatory measures, statistical monitoring, and legislative support.

Our brief analysis will start with such an economic and business category as demand.

Demand is always a benchmark for entrepreneurial activity. Where there is no demand, business becomes impossible, because people and enterprises are ready to part with money only in exchange for goods, works and services that they currently need.

Demand is a variable quantity; it appears, then disappears, then grows rapidly or exists in small volumes for a long time. Depending on the parameters of demand, markets for one or another product begin to form - raw materials, semi-finished products, fuel, clothing, food products, machine tools, equipment, entertainment. Increasing demand creates growing markets that provide profit to the companies involved in their work.

Large, mass demand is satisfied, as a rule, by large enterprises organized in the form of network structures, holding companies, public joint-stock companies and international corporations. Typically, such enterprises operate in such areas as aircraft construction, the production of cars and trucks, in the financial and banking sector, the oil and gas industry, etc. Such companies, most often, are transnational and operate simultaneously in many markets - both national and foreign.

Medium-sized enterprises with a workforce of several hundred people operate in a niche of less volume demand - for example, in the markets for goods and services of a geographically limited region - cities, regions, republics.

The small business sector is mainly trade and services. In Russia, three-quarters of small enterprises work in this field, although the state is trying to change this structure towards real production, involving small enterprises in the system of public procurement and tenders. So far it's not going very well, but big plans are being made. As for the development of small and medium-sized businesses, by 2020 it is planned to involve 40 million people in this business area and increase the contribution of small businesses to GDP up to 40%. Recall that at the beginning of 2018, the share of small businesses is only 21% and has remained fairly stable over the past 10-15 years. The state is trying to involve citizens in the sphere of small and medium-sized businesses (SMEs) for good reason:

firstly, along with the growth in the number of SMEs, the number of manufactured products increases, i.e., the GDP and the well-being of the population grow;
secondly, unemployment is improving, as SME organizers not only provide themselves with jobs and profits, but also create jobs for other people.

In addition to large, medium and small businesses, microbusiness is often mentioned, which includes microfinance organizations, individual entrepreneurs, farmers, and partly self-employed citizens.

If we talk about specific criteria for attributing enterprises to one or another gradation, then for the EU countries they are as follows (see Table 1).

If we talk about our country, then at present in Russia there are the following criteria for classifying business entities as micro, small and medium-sized businesses. Small business entities are understood as commercial organizations in which the average number of employees does not exceed the following limit levels:

The average number of employees for the previous calendar year should not exceed the following limit values for the average number of employees for each category of small and medium-sized businesses:

a) from 101 to 250 people inclusive for medium-sized enterprises;

b) up to 100 people inclusive for small businesses; among small enterprises, micro-enterprises stand out - up to 15 people.

The average number of employees of a small enterprise for the reporting period is determined taking into account all its employees, including those working under civil law contracts and part-time jobs, taking into account the actual time worked, as well as employees of representative offices, branches and other separate divisions of a legal entity.

Proceeds from the sale of goods (works, services) excluding value added tax or the book value of assets (residual value of fixed assets and intangible assets) for the previous calendar year should not exceed the limit values established by the Government of the Russian Federation for each category of small and medium-sized businesses.

In accordance with Decree of the Government of the Russian Federation of February 09, 2013 No. 101 “On the marginal values of proceeds from the sale of goods (works, services) for each category of small and medium-sized businesses”, the marginal values of proceeds from the sale of goods (works, services) for the previous year excluding value added tax are for

- micro-enterprises - 60 million rubles;

- small enterprises - 400 million rubles;

- medium-sized enterprises - 1000 million rubles.

See: Vershinina A.P. Small business: criteria for attribution and classification.

Not many people know the difference between small, medium and large businesses. To understand the differences between these concepts should, especially, a novice entrepreneur. In the case of defining the idea of entrepreneurship and writing a business plan, you should have ideas about the future occupation.

What it is

Small business is the most common form of entrepreneurship, which is chosen by most start-up businessmen.

Medium business̶ it is a form of entrepreneurial activity that, in comparison with a small business, has a more impressive annual income and more extensive and diverse resources for commercial activities.

Big business is a form of entrepreneurship that includes popular companies covering an entire country or more than 2 countries of the world, as well as having a strong demand from consumers.

Key Features of Entrepreneurship

Each form of commercial activity ̶ SMEs or big business has its own characteristics, which makes them different from each other.

small features

Small businesses are not only individual entrepreneurs, but also companies whose average annual number of employees is at least 50 people.

The territorial activity of these companies is small, and the list of their areas of activity may include:

the shops;
firms with a small production that produce small volumes of goods;
companies with tourism activities;
medical offices (dental, etc.);
various training courses, etc.

For small businesses, the period for conducting inspections has been reduced and annually is no more than 50 hours.

Until December 31, 2018, these businesses are granted a two-year supervisory vacation, during which no supervision will be carried out. Sanepidemnadzor and fire inspection visits are not threatened, and the activity license will not be checked.

According to part 2 of article 10 of the Federal Law “On the protection of the rights of legal entities and individual entrepreneurs in the exercise of state control (supervision) and municipal control”, upon receipt of complaints from consumers about violations of the law, an audit will be carried out.

In 2018, entrepreneurs who:

register for the first time;
carry out industrial, social or scientific activities;
provide services to the public.

Small businesses do not need proof of status. It is only necessary to adhere to the above limits (income, number of employees and share in the authorized capital). If the limits were exceeded within 1 or 2 years, then this is not a reason for losing status. In this case, it will be kept for 3 calendar years.

signs of mean

Compared to a small business, medium business includes entire networks of enterprises working for a large consumer audience. This entrepreneurial form can carry out its activities not only within the whole city, even within the region.

Compared with small businesses, where a large role is assigned to staff, on average - the quality of goods (services) is put in the foreground. Since the average enterprise is not large, it will not be difficult for it to adapt to changing market conditions.

Large or big business

Large businesses can spend money advertising their products on the most popular television channels. In different cities and countries, this form of business has its own branches and representative bodies, employing hundreds of thousands of employees.

The subjects of large business are large companies that:

engaged in the production of equipment: Apple, Bosch, Samsung, Lenovo, etc.;
produce food products: MC.Donald, Nestle, Coca Cola, etc.;
produce vehicles of automobile brands: Ferrari, Bogati, Alfa Romeo, BMW, etc.

The criteria are easy. In order to be a major entrepreneur, you must meet the following:

have at least 251 employees:
receive income of at least 2 billion rubles;
timely inventory and revaluation of fixed assets.

Since 2016, a unified register of SMEs has been operating, which contains enterprises that have received the status of SMEs.

These forms of entrepreneurship acquire the status of SMEs if they meet the criteria below:

have a certain amount of income;
have a certain number of employees;
have a certain share of participation of other companies in the authorized capital.

According to article 4 of the Federal Law "On the development of small and medium-sized businesses in the Russian Federation", these limits do not apply:

persons holding shares in the economic high-tech sector;
persons participating in the Skolkovo project;
companies that practically apply the latest technologies developed by their owners ̶ budgetary and scientific institutions;
companies whose founders are included in the government list of persons who provide state support for innovation.

If an individual entrepreneur does not have employees, then his status is determined by the criterion of their annual income. If individual entrepreneurs and LLCs were included in the unified register of SMEs for the first time, then their status should be determined by the criterion of the number of employees.

If an enterprise receives the status of an SME, then certain benefits are provided to it, namely:

the right to keep as much money in the cash register as you want and there will be no fine for this.
the ability to maintain simplified accounting. This does not apply to individual entrepreneurs, since they are not required to keep records. And companies are required to charge annual depreciation, and not once a month.
endowed with an advantage in the purchase of state and municipal real estate, etc.

List of enterprises that meet the specified criteria, annually formed by the Ministry of Industry and Trade of the Russian Federation. This list is provided to the Federal Tax Service of Russia, after which certain information is entered in the register by the tax authorities.

We bring to your attention a video that talks about why big business wins.

Main advantages

Both SMEs and large companies have their own strengths and weaknesses.

The list of advantages of small business is as follows:

the presence of a small need for initial capital;
relatively low costs during the implementation of entrepreneurial activities;
availability of a quick response to changes in the market sphere;
the presence of a relatively fast turnover of equity capital;
the trend of growth of vacant vacancies, which has a beneficial effect on the increase in populated employment.

The main advantages of a medium-sized business are:

creation of new places of employment;
high productivity of capital investments;
relatively high profitability;
high competitiveness and mobility.

Big business is also endowed with positive qualities, namely:

the ability to ensure economic stability in the country;
the ability to change the external business environment;
the ability to save on production costs;
implementation of modern technologies in business, etc.

Cons and risks

In order to start building your business, an entrepreneur must familiarize himself with the main disadvantages of various enterprises. For example, small business has the following disadvantages:

relatively high level of risk;
dependence on big business;
the presence of a low professional level of managers;
difficulties in obtaining loans and subsidies.

The size of the initial capital also matters. For example, if this size is large, then the firm will be able to hold out during the crisis period.

Medium business also has certain disadvantages, namely:

the presence of fierce competition and the threat of being taken over by large companies;
the presence of barriers and difficulties in obtaining a license and patents;
frequent shortage of working capital;
difficulties in obtaining loans due to lack of confidence in banks.

Big business is also not without problems. The main disadvantages of this business are the presence:

excessive economic concentration;
localization of economic relations;
blocking horizontal commercial links that do not go beyond a particular company.

Differences among themselves

For an illustrative example of the differences between small medium and large businesses, we can cite the following table.

Basis for success

Despite the dependence on the external environment, small business can also be successful. Only the best employees in their field work here. The success of this business is determined by having a strategic plan for the development of the enterprise.

Medium business can easily adapt to changing market conditions. Success also depends on having effective management.

The main success of a large enterprise is the presence of effective business models that are built in such a way that even after 10 years they continue to work, surviving crisis situations and bringing huge income.

Regulatory regulation

Questions regarding the implementation of entrepreneurial activities by SMEs and large companies, governed by a number of laws, namely:

Federal Law "On the protection of the rights of legal entities and individual entrepreneurs in the exercise of state control (supervision) and municipal control" dated December 26, 2008 No. 294-FZ.
Federal Law "On the development of small and medium-sized businesses in the Russian Federation" dated July 24, 2007 No. 209-FZ.