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SME's - Small and Medium Enterprises
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The initials SME are used worldwide as shorthand to describe the different categories of overall business size.
In Australia the size of firms fall in four categories based on the number of full-time equivalent employees in the firm.
For example the Australian government defines them as follows. Although other countries might use a slightly different definition they still fall into the overall SME category:
- Very Small (1-9) Very small firms have up to 9 full-time equivalent employees. Often firms with less than 5 employees are sometimes described as microbusinesses.
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- Small (10-49) Small firms have 10 to 49 full-time equivalent employees.
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- Medium (50-149) Medium sized firms have 50 to 149 full-time equivalent employees.
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- Large (150+) Large firms 150 or more full-time equivalent employees.
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Australia's Red Tape & Your Business
In 2005 some estimates have put the overall cost to the nation of Australia's regulatory burden at around A$86 billion a year!
New laws and regulation are increasing by 10 per cent a year, or three times faster than the rate of GDP growth!
Apparently more pages of legislation have been passed in Federal Parliament since 1990 than in the first 90 years of federation! In the superannuation industry there has been a change in the laws every 6 weeks for the past 23 years!
There are no accurate estimates of the total cost to business! Only rough estimates but of course with the Internet and services like Business Online Australia this no longer needs to be the problem that it now is.
The USA
In the USA the cost of complying with laws and regulations cost small firms nearly half a trillion dollars in 2000, or US$7,000 per employee in firms with fewer than 20 employees.
The annual regulatory compliance burden in 2000 was estimated to be US$6,975 per employee - nearly 60% higher than the US$4,463 estimated for large firms with more than 500 employees. And consumes over eight billion hours annually of otherwise productive time.
The average “highly regulated” business (e.g., restaurants, gas stations, dry cleaners) needs to apply for, and receive, an average of 10 to 15 licenses and permits. It can be difficult, time-consuming, and ultimately very costly for businesses to determine which laws and regulations apply and learn how to comply.
Yet a nations living standard depends on business productivity !
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