Role Of Small Medium Enterprises
Role Of Small Medium Enterprises
A
small-medium enterprise is a business having assets, revenues or numbers of
employees fall below a certain level. The standard for determining an SME
differs from country to country and varies between industries. You can refer to
Small medium enterprise examples to understand exactly what their roles are,
and how they contribute to the nation’s economy?
What
are SMEs?
The
privately owned businesses whose capital, assets and workforce fall below a
threshold value set by the national guidelines are termed as small and medium
enterprises.
Grocery
Stores, Local restaurants, Garages that serve a hyperlocal target audience
comes under the blanket of Small medium enterprise examples. The reason is less
revenue along with the less workforce and assets.
If
you are interested to know the exact definition of an SME, you should clear in
your mind that it depends on the country where the business operates. It also
depends on the industry. Also, these SMEs play a vital role in the vast
majority of large businesses.
Features
of SMEs
Keeping
aside the fact that you will encounter different definitions of SMEs in
different countries, the characteristics of Small medium enterprise examples
will remain the same.
● Bounded Investment:
Since SMEs operate on a small-scale, their capital requirement is really less.
● Labor-Intensive:
In SMEs, heavy or sophisticated machinery are rarely used. Therefore, you can
find many Small medium enterprise examples which make use of more
labour-intensive techniques.
● Smaller Number of
Employees: SMEs requires a less number of
employees as compared to large organizations and big corporations. The reason
behind this is their small scale of operations.
● Local Area of
Operations: SMEs perform local area of operations
and remain there for a longer duration sometimes years or maybe decades. This
helps them in building a strong and healthy relationship with their local
customers.
● Management:
In many cases, you will find a single owner or a very small group of people
handling the whole management of the business.
How
SMEs are important?
Today,
SMEs are acting as the supporting pillar of any global economy in different
ways. Without Small medium enterprise examples, the economy really cannot
survive.
Utilization
Of Local Resources
Having
small-medium businesses in small towns or rural areas improves the whole
process of the utilization of resources in a specific area. The factories will
open up for the effective utilization of iron ore if a town is rich in iron ore
mines.
Employment
Generation
Increasing
SMEs are one of the best solutions to remove unemployment from any country. It
provides good job opportunities for local residents. In developing countries
like India, unemployment has become a major problem but having these businesses
provide great relief.
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