SMB, SME/ “Mid-Market” and large enterprise… What’s the difference, and why does your business size classification matter?
As you probably realize, these acronyms are size classifications forcompanies – and your business most likely fits within one of the classifications. Although it may not seem like a big deal, understanding how others classify your business can make a difference, especially when it comes to choosing technology solutions that best fit your particular business.
Depending on whom you ask, there are several definitions and key differentiators that influence the classification into which your business falls. The widely accepted definition of each business size classification is based on the number of employees and annual revenue – and even those classification ranges can vary. For example, “SMB” includes the general term of small business, but a small business can be broken down further.
In addition to size and revenue,yourbuying habits and technology needs also typically align with a particular business size classification. Many technology solutions are built with these classifications in mind, or at least have features and pricing that correlate to the business classifications. Understanding which category your business falls into can help you define your objectives, specify capabilities, and then match those to theright technology solutions.
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Here are some definitions and defining characteristics of the most commonly used business classifications:
What is SMB?
- What does the SMB acronym stand for? SMB stands for Small and Medium-Sized Businesses
- What is considered a small business? What is considered a medium-sized business? Employees: 0-100 is considered a small-sized business; 100-999 is considered a medium-sized business. Note that these size specifications may be defined differently by some government organizations, such as the Small Business Administration (SBA) which uses the size specifications as part of its process for granting small business loans and for consideration of awarding Federal contracts.
- Annual Revenue: $5-$10 million
- IT Staff: Typically one or a few
- IT skills: Modest. Employees usually learn on the job.
- Location: Limited geographical boundaries (but may have more remote workers due to outsourcing)
- Limited CapEx
- Main considerations for technology purchases include price (because of limited CapEx) and ease of use (because of less experienced IT staff). SMBs prefer the pay-as-you-go subscription model for software purchases
- The 28 million small businesses in the US account for 54% of the country’s sales
What is SME?
- What does the SME acronym stand for? Small and Medium Enterprises. Also known as the “Mid-Market”
- What is SME? How is SME different from SMB? The SME definition is more globally-used than SMB, and is the official market phrase for internationally-based enterprises such as the United Nations, World Bank, World Trade Organization and the European Union.
- Employees: The European Union has defined an SME as a legally independent company with 101-500 employees
- Annual Revenue: $10 million- $1 billion
- IT staff: A small group to several employees
- IT skills: Generalist skills. Employees often lack specialty skills
- Location: Likely to have more than one office location, and more remote employees
- Some CapEx
- Main considerations for technology purchases include capabilities, functionality, and reporting
- If the middle market were a country, its GDP would rank it as the fourth-largest economy in the world
Large enterprise determining features:
- Employees: Over 1000 employees
- Annual Revenue: Over $1 billion
- IT Staff: Full time IT staff, including several specialists
- IT Skills: A wide variety of broad and specific skills
- Location: Several office locations domestically and internationally
- Large CapEx
- Main considerations for technology purchases include guaranteed up-time, advanced features, and security
- In 2012, a large enterprise level company employed 9 million people in the US (51.6% of all employees)
Small Business VS. Large Business: When Company Size Makes a Difference
As I mentioned, whether you are considered an SMB business, an SME, or a large enterprise influences many things, such as how financial decisions are made, the way your technology needs are framed, and how solution providers treat you during the sales process. When dealing with SMBs, for example, solution providers are often trained to focus on the cost savings and ease-of-use of the solution and are aware that budget is usually a key factor influencing your decision. A vendor considers it highly likely that the purchaser of the solution (you) will be the one using the solution on a daily basis.
In the case of the enterprise level company, the provider won’t focus as much on price and ease-of-use as it might on security and advanced features, for example. Keeping this information in mind, if your individual circumstance strays from the norm, you should inform the vendor so they can give you the specific information you need. Let’s say you are an SMB business and happen to have multiple locations or a large CapEx, your solution provider may be able to offer you a product or feature that they normally wouldn’t mention to a smaller business.
Whether you are searching for advanced solution features, a cost-effective option, or an easy-to-manage platform, knowing how your business is classified, the norms for that classification, and how your needs compare to those “norms,” are all key to helping you adequately compare technology solution vendors and then decide which solution is the best fit for your business.
One of the most important technologies that businesses currently use is their phone system; it’s relied upon daily to communicate with customers via voice calls, video conferencing, and more. The latest innovation in the business phone industry is Unified Communications, a term that refers to unifying all streams of communication into a single platform to foster smarter analytics for business decision-makers as well as increase workforce productivity by improving user experience. Like other technologies, knowing your business size classification can help you to understand what you need from a communications solution and the benefits it can bring your organization, enabling you to ultimately make a smarter decision.
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Next Steps
For help choosing the phone system that’s right for the size of your company, check out Switchvox, the highly affordable, easily scalable business communications solution.
How Can Sangoma Help SMB, SME and Large Enterprises?
Now that you know why your business class matters, and you can determine whether your organization is a SMB, SME or large enterprise, we invite you to explore the products and services we offer to companies of all sizes.
Choosing The Best Business Phone System
Modern businesses of all sizes (SMB, SME and large enterprises) are requiring more sophisticated technology to better serve their customers. For organizations who are still using legacy telephony, it’s time to start the search for the best business phone system – and Sangoma is here to help. Let us help you select the best business phone system for your organization.
Why SMBs Need Unified Communications
Unified Communications is not just for larger companies “that have the money” to spend on it. Unified Communications has become necessary for all companies. Today’s workforce arrives with the need to be mobile, the need to improve efficiency, and the need to reduce or at least streamline costs. That’s why SMBs need Unified Communications.
Video Conferencing for SMBs, SMEs and Large Enterprises
Sangoma Meet is a video conferencing tool that actually makes meetings better. Plan, host, and share your meetings. Sangoma Meet secures your information and safeguard your privacy, allows you to meet from anywhere on any device, and integrates with your existing technology investments.
Which SIP Trunking is Right for SMB, SME and Large Enterprises?
Do you know what SIP trunking is and how SIP trunking works? Take a minute to read about the basics of SIP Trunking. After learning more, explore our whitepaper to help you determine which SIP trunking is right for your business. Then learn why SIP Trunking channelized pricing is perfect for businesses that prefer a set, predictable monthly phone bill.
FAQs
Should I use SMB or SME? ›
Strictly speaking, the difference between SMBs and SMEs are blurred. An SMB is a small-to-medium sized business, whereas an SME is a small-to-medium sized enterprise. Generally speaking, a company is usually associated with the service industry, where an enterprise is involved in manufacturing.
What is the difference between SMB and SME? ›SMBs are defined as having less than 100 employees and between $5-$10 million in annual revenue. SME: Small and Medium-Sized Enterprises. Also known as “mid-market”. SME's are defined as having between 101-500 employees and between $10 million and $1 billion in annual revenue.
How do you classify small medium and large businesses? ›Micro-sized business: less than 10 employees. Small-sized business: 10-49 employees. Medium business: 50-249 employees. Large-sized business: more than 250 employees.
What is the size of an SMB? ›Small And Midsize Business (SMB)
The attribute used most often is number of employees; small businesses are usually defined as organizations with fewer than 100 employees; midsize enterprises are those organizations with 100 to 999 employees.
- SALES REVENUE (or VALUE OF OUTPUT) ...
- PROFIT. ...
- NUMBER OF EMPLOYEES. ...
- MARKET SHARE. ...
- CAPITAL EMPLOYED. ...
- MARKET CAPITALIZATION. ...
- OTHER METHODS used to measure business size.
An SMB share, also known as an SMB file share, is simply a shared resource on an SMB server. Often, an SMB share is a directory, but it can be any shared resource. For example, network printers are often shared using SMB.
How do you classify the size of a business? ›There are four sizes of company to consider when preparing and filing accounts and reports in accordance with the Companies Act 2006 (CA 2006) - micro-entity, small, medium-sized and large. The entitlement to a particular company size regime is determined by reference to criteria set out in CA 2006.
What is SMB is used for? ›Feature description. The Server Message Block (SMB) protocol is a network file sharing protocol that allows applications on a computer to read and write to files and to request services from server programs in a computer network. The SMB protocol can be used on top of its TCP/IP protocol or other network protocols.
What does SMB mean in business? ›SMB is an abbreviation for small and medium-sized business, sometimes seen as small and midsized business. A business with 100 or fewer employees is generally considered small, while one with 100-999 employees is considered to be medium-sized.
What are the 4 types of enterprise? ›- Sole Proprietorship.
- Partnership.
- Private Limited Companies (Ltd.)
- Public Limited Companies (PLC)
What are the 4 kinds of business size? ›
- Small business. A small business is, well, the smallest business size. ...
- Mid-market enterprise. Mid-market enterprises are more expansive than small businesses, but not quite as big as a large enterprise. ...
- Large enterprise.
1) SME (small-to-medium enterprise) is a convenient term for segmenting businesses and other organizations that are somewhere between the "small office-home office" ( SOHO ) size and the larger enterprise .
What does SMB mean in sales? ›SMB stands for small and midsize business. While by some definitions small businesses are those with fewer than 100 employees and midsize businesses have fewer than 1,000, the numbers are subjective.
How do I know if a company is an SME or MNC? ›- Number of employees: There are typically more employees in an MNC than in an SME.
- Annual revenue: An MNC typically generates more revenue than an SME.
- Number of departments: There are usually more departments in an MNC than in an SME.
Generally, larger firms have larger financial reserves and can withstand larger macro risks (e.g., pandemic, financial crisis, etc.). Larger firms are more likely to "cut the fat" during lean times (as there has may have been wasteful growth that can be reduced more than smaller firms).
What is the ideal company size? ›Lately I've been reading a lot about “Dunbar's number,” which is based on research by British anthropologist Robin Dunbar who claims that the optimal size of communities, and even business organizations, is approximately 150 members.
What is an enterprise company size? ›Employees: Over 1000 employees. Annual Revenue: Over $1 billion. IT Staff: Full time IT staff, including several specialists.
Is SMB outdated? ›Since Windows 10 Fall Creators Update and Windows Server, version 1709 (RS3), the Server Message Block version 1 (SMBv1) network protocol is no longer installed by default. It was superseded by SMBv2 and later protocols starting in 2007. Microsoft publicly deprecated the SMBv1 protocol in 2014.
Is SMB still used? ›As you can see in the table, Windows 11 and Windows Server 2022 still use the SMB 3.1. 1 dialect which has few new features and security enhancements.
Does SMB mean small medium business? ›SMB is an abbreviation for small and medium-sized business, sometimes seen as small and midsized business. A business with 100 or fewer employees is generally considered small, while one with 100-999 employees is considered to be medium-sized.
Does Windows still use SMB? ›
Windows 10 Enterprise, Windows 10 Education, and Windows 10 Pro for Workstations now include SMB Direct client support.
Is SMB a security risk? ›Unprotected SMB ports on Windows servers are an easy target for hackers to exploit to gain further entry to your internal network. Therefore, it is important for your company to implement the following procedures to help keep your SMB ports safe.
What are the advantages of SMB? ›Some main lease types are read-caching, write-caching, and handle-caching. The Oplock feature of SMB gives it many advantages such as file caching, simultaneous access, synchronization of the cache to reduce round trips, and thus overall better file sharing performance.
Why is SMB a security risk? ›Why is it a risk? Version 1.0 of SMB contains a bug that can be used to take over control of a remote computer. The US National Security Agency (NSA) developed an exploit (called “EternalBlue”) for this vulnerability which was subsequently leaked.