SMEs vs. Big Businesses: Which is the Most Successful?


There’s a common belief that only large businesses get the big money and are more successful than SMEs (small and medium enterprises). However, this isn’t always the case. SMEs have been growing steadily since 2007 in the United Kingdom and have come to form an integral part of the economy.  

For a business to be considered as a small and medium-sized enterprise it means that it has less than 250 employees - whereas micro-businesses hire 0-9 employees and large organisations employ more than 250 employees. The reason large enterprises – LEs – have a prominent role in the UK is because that they have a high share of value (49%) and proportion of employment (46%). Also, the country’s open economy and its well-established financial markets make the UK an ideal location for setting up a big corporation.

However, the SBA Fact Sheet for the United Kingdom states that “smaller organisations are more agile, have closer links with customers and are more capable of retaining a degree of entrepreneurial spirit.” The Telegraph also says that SMEs are “the lifeblood of the UK economy”. Not only have these companies created many new jobs since the financial crisis, but they have also have been the main force behind the country’s economic development as a whole. 

Business Statistics have shown that in 2014 there were 5.2 million businesses in the UK, over 99% of which were small and medium enterprises. These companies alone had 15.2 million people working for them across the country and calculated a combined turnover of 1.6 trillion pounds. More specifically, the FSB stated that in the same year the services industries accounted for 73% of businesses, 79% of employment and 70% of turnover whereas in the manufacturing sector SMEs accounted 5% of businesses, 10% of employment and 16% of turnover.

Generally, medium-sized enterprises seem to be doing better financially and are considered to dominate the business economy. Since they are more able to sustain the business economically through tough times, they are seen as more reliable within the market in comparison to smaller-sized enterprises.

As far as it concerns business turnover, SMEs seem to outdo many large businesses in certain sectors and areas around the United Kingdom. This is also evident through the interactive chart created by Hiscox that allows you to compare turnover regarding the different industries and areas across the country: 


This useful chart gives you a comprehensive outlook of each sector e.g. manufacturing, construction, education etc., so that you are in a better position to make judgments as to the viability of SMEs and gain a better insight into the market.

See Also: Can Greed be a Good Thing for Your Business?  

If you are thinking of starting a business in the UK; you first need to look at the advantages and disadvantages to effectively assess the possibilities of success in regards to business profitability and sustainability. Overall, the future of SMEs looks promising though as their number is expected to increase by the end of 2015.

So, what do you think? Are SMEs more successful and profitable in the long run than larger enterprises? Feel free to share your thoughts in the comments section below…





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