Government figures show that small and medium sized businesses make up 99.9% of the business population. And as a result, make a significant contribution to the UK economy.
A range of businesses can be included within this SME category from small start-ups to established businesses. The small business definition is also an important one as it can impact your eligibility for grants and schemes.
Small Business Definition
The UK government typically adheres to the EU definition of an SME. The broad definition of an SME is one which employs fewer than 250 people, with an annual turnover not exceeding €50million and/or an annual balance sheet not exceeding €43 million.
Within this broad small business definition, there are 3 categories of business defined:
Micro Business Definition
A business which has:
- Less than 10 employees
- Turnover or annual balance sheet under €2 million
Small Business Definition
A business which has:
- Less than 50 employees
- Turnover or annual balance sheet under €10 million
Medium Business Definition
A business which has:
- Less than 250 employees
- Turnover under €50 million
- Or an annual balance sheet not exceeding €43 million
There are other ways to define a small business, so it is not true to say that there is one standard small business definition. The Companies Act 2006 for example provides a small business definition as meeting two or more of the following criteria; having less than 50 employees, a turnover of less than £10.2million and a total balance sheet of no more than £5.1million.
Large Business Definition
According to many government sources, a large business is one which has 250 or more employees.
Why and when are these definitions important?
The size of your business will impact a number of important areas:
Government finance and support schemes
Business finance support schemes and grants operated by the government can vary depending on the size of your business.
There is a range of small business support available. You can use the governments Finance and support for your business online tool to identify support and grants you may be eligible for. You can filter by number of employees, location and industry amongst others.
Coronavirus Support
There are a range of small business Coronavirus support schemes available, eligibility for some which depend on the size of your business.
Insurance
Whatever the size of your business, insurance is a vital consideration. And one you must get right in order to protect your business, employees and customers.
If you employ any members of staff then it is a legal requirement to have employers’ liability insurance in place.
You’ll also want to consider cover such as professional indemnity insurance if you provide advice, public liability insurance if you interact with members of the public or clients at their business premises, or cyber liability insurance if you have an online presence and/or store customer data.
At Anthony Jones, we work hard with our small business customers to provide a personal service tailored to the needs of your business. We have a team of experienced small business insurance specialists who spend the time getting to know you and your business so that they can provide informed advice about the insurance you need. For more information or to talk to one of our experts get in touch with us on 020 8290 9080 or email us at business@anthonyjones.com.
