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SME stands for Small to Medium Enterprise.

However, what exactly an SME or Small to Medium Enterprise is depends on who’s doing the defining. Industry Canada uses the term SME to refer to businesses with fewer than 500 employees, while classifying firms with 500 or more employees as "large" businesses.

Breaking down the SME definition, Industry Canada defines a small business as one that has fewer than 100 employees (if the business is a goods-producing business) or fewer than 50 employees (if the business is a service-based business). A firm that has more employees than these cut-offs but fewer than 500 employees is classified as a medium-sized business.

A microbusiness is defined as a business with fewer than five employees.

In its ongoing research program that collects data on SMEs in Canada, Statistics Canada defines an SME as any business establishment with 0 to 499 employees and less than $50 million in gross revenues.

Different countries define SMEs differently.

In the EU, a similar system is used to define Small to Medium Enterprises. A business with a headcount of fewer than 250 is classified as medium-sized; a business with a headcount of fewer than 50 is classified as small, and a business with a headcount of fewer than 10 is considered a microbusiness. The European system also takes into account a business’s turnover rate and its balance sheet.

There does not seem to be any standard definition of SME in the U.S.

Also Known As: Small to Medium Enterprise.
Common Misspellings: Small to Medium Entreprise.
Having a standard SME definition makes gathering and analyzing statistical information about businesses easier.

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