when it comes to tax reporting the internal revenue service irs does not categorize businesses into smes instead it separates small businesses and self employed individuals into one group and midsize to large businesses into another the irs classifies small businesses as companies with assets of 10 million or less and large businesses as those with more than 10 million in assets 78
the sba office of advocacy reported almost 33 2 million small businesses in the u s as of march 2023 of these 82 did not have any employees within the u s economy small businesses comprise 99 9 of all firms 99 7 of all firms with paid employees and 97 3 of exporters 9in the united states smes are disproportionally owned by white males highlighting the lack of access to financial and entrepreneurial resources across races and genders for example a march 2023 report by the sba found only 19 6 of employer firms were owned by minorities and only 21 7 of employer firms owned by women 10the canadian government issues canadian industry statistics that define each type of business based on the number of employees it has 11in 2023 businesses with fewer than 100 employees accounted for 97 9 of all employer businesses in canada small and micro businesses employed 10 9 million individuals more than 62 of the total employed workforce 12the european union eu offers definitions of what constitutes a small size company as well small size enterprises are companies with fewer than 50 employees and medium size enterprises are ones with fewer than 250 employees in addition to small and midsize companies there are micro companies which employ up to 10 employees 13as is the case in other countries smes represent 99 of all businesses within the eu smes employ an estimated 100 million individuals and generate more than half of the european union s gross domestic product gdp 14china s system of classifying the size of chinese companies is complex in general companies are defined based on their operating revenue number of employees or total assets the following examples highlight these classifications under the five year plan from 2021 to 2025 china plans to invest heavily in its small and midsize enterprises the country is expected to cultivate 1 million smes and 100 000 smes that feature innovation during this time according to the department of industry and information technology 16in developing countries such as kenya and india small and midsize enterprises go by the acronym msme short for micro small and medium size enterprises regardless of criteria countries share the commonality of separating businesses according to size or structure 1718many people in emerging economies find work in small and midsize enterprises smes contribute roughly 50 of total employment and 40 of gdp in these countries according to the organisation for economic co operation and development oced the world bank estimates that a majority of formal jobs in emerging markets seven out of 10 jobs are generated by smes however these small businesses often face greater financing challenges compared to their developed country counterparts the world bank estimates that msmes in developing countries have unmet financing needs in excess of 5 trillion every year 19the importance of small and midsize enterprises smes a plethora of data demonstrates the massive economic impact that smes have on a country s economy specific to the united states smes play a vital role in the success of the nation s economy by contributing in a variety of ways 2021small businesses also have distinct advantages over larger companies estimated number of smes in the united states according to the office of the united states trade representative 22