Year 11 Prelim Business Studies: SMEs
CHAPTER 10: Small to medium enterprises (SMEs)
The more adaptive and dynamic SMEs have responded to this environment through increased spending on research and development (R&D), new product developments, improved business practices, and an export-oriented business culture. SMEs play a crucial role in the Australian economy. They are a major source of employment and their total output adds significantly to the economic growth and wellbeing of Australia.
Definition of SMEs
Although there is no single universally accepted definition of a SME, a number of quantitative measurements (those based on statistical calculation) and qualitative measurements (those based on personal observations and a description of the business) can be used to determine whether a business is small or medium sized: number of employees type of ownership sources of finance legal structure market share
Management structure.
Common characteristics of SMEs
Many SME owners want to stay small to avoid the pressures and difficulties often experienced in larger businesses. They are content with the size of their business, especially knowing they can offer personalised service to their customers.
The number of SMEs
In 2010 SMEs accounted for approximately 98 per cent of all private sector business. However, it is difficult to provide an accurate count of the number of SMEs in Australia for two reasons. First, as was previously explained, there is no universally accepted definition of a SME. Second, the SME sector is extremely dynamic and changing daily. During a boom time in the economy, the number of SMEs increases rapidly. During a recession, business failures far outweigh business commencements.
The role of SMEs
Five important features that indicate the overall importance of the SME business sector to the Australia economy are: providing employment produce products generate increasing amount of total exports provide a wide range of products used by large companies
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The more adaptive and dynamic SMEs have responded to this environment through increased spending on research and development (R&D), new product developments, improved business practices, and an export-oriented business culture. SMEs play a crucial role in the Australian economy. They are a major source of employment and their total output adds significantly to the economic growth and wellbeing of Australia.
Definition of SMEs
Although there is no single universally accepted definition of a SME, a number of quantitative measurements (those based on statistical calculation) and qualitative measurements (those based on personal observations and a description of the business) can be used to determine whether a business is small or medium sized: number of employees type of ownership sources of finance legal structure market share
Management structure.
Common characteristics of SMEs
Many SME owners want to stay small to avoid the pressures and difficulties often experienced in larger businesses. They are content with the size of their business, especially knowing they can offer personalised service to their customers.
The number of SMEs
In 2010 SMEs accounted for approximately 98 per cent of all private sector business. However, it is difficult to provide an accurate count of the number of SMEs in Australia for two reasons. First, as was previously explained, there is no universally accepted definition of a SME. Second, the SME sector is extremely dynamic and changing daily. During a boom time in the economy, the number of SMEs increases rapidly. During a recession, business failures far outweigh business commencements.
The role of SMEs
Five important features that indicate the overall importance of the SME business sector to the Australia economy are: providing employment produce products generate increasing amount of total exports provide a wide range of products used by large companies
Earn more