Write 2 page essay on the topic Challanges for The SME’s ( Small and Medium Size Enterprises ).
The annual balance sheet of the organization should not be more than 43 million euros.
Hallberg (2000) further explains that in Europe, different countries have a definition of SMEs. For instance in Germany, an SME must not exceed a limit of more than 255 employees. In Belgium the number of employees must not exceed 100 people. This means that a company that has 255 employees in Belgium would pay taxes at a full rate, but it will qualify for a subsidy in the European Union (Padoan, 2010). In the United States, there is a criteria used in the definition of an SME. This criterion is based on the structure of ownership, the type of industry, the number of employees, and the revenue that the organization gets. In the United States, the cap that limits an organization identified as an SME may be 1500 people, but on most occasions, the cap stands at 500 people (Nummela, 2011).
SMEs normally face a series of challenges, and one such challenge is the inability of the organization to get some appropriate office space (Lenihan, 2010). For instance, an SME would need some appropriate infrastructures in their buildings, which comprises of adequate water and electrical facility. However, these organizations rarely receive such facilities (Jetter, 2006). This is because of inadequate financing, and capital resources that can make them to afford these kinds of facilities. Furthermore, SMEs are always unable to access high quality internet services at a cheaper cost. This is because most of them have to get their own DSL links or wireless internet services which are always expensive. This is because they are unable to pool their resources and purchase bulk internet connectivity at a wholesale price (Levy, 2005).
Most entrepreneurs of SMEs normally lack experience, and this plays a role in the failure of their business enterprises. Because of their inexperience, they are