M class

Q: If there are approximately 4.3m SME’s in the UK then how many of this 4.3m are M’s (medium-sized enterprises)?

A: 26,000 are M’s

Our M class is a select group.  Contrast this with 3.2m SME’s of the one person variety (e.g. sole traders and companies comprising only one employee) and it’s clear what a wide range of businesses the term SME actually covers.

The M's face unique and numerous challenges. Market share and globalisation are vital factors. Unlike a self employed electrician there is distinct possibility that the M’s market share could be eroded from global competition such as China. Technology becomes a serious issue. A small business can act as a team and get around system deficiencies, but as the company grows streamlined systems are essential to gain efficiencies and maintain control.

If the challenges are unique and numerous for the M in SME then as Jyoti Banerjee notes in his guest post at Vinnie Mirchandani’s blog:

Leaders of Ms often struggle when it comes to knowing where to turn for help and advice. They are rarely plugged into peer networks where they discuss their challenges and learn new ideas relevant to their scale of organisation.

This gap is about to be plugged with the M Institute.  It’s early days, but it looks promising.  The next meeting is in Birmingham.  Mmm, maybe it's time I took a trip out of London.

Technorati Tags: small business medium sized business sme smb blogging accountants  sme-blog

Comments

[Dennis H]

Jyoti is a class act - he was my commissioning editor years ago on a now dead publication called Computers & Finance. Small world eh? Even smaller - his first full time editor is a colleague with whom I ended up in a research partnership. He now lives in San Francisco and we're meeting up in October when I do the Office 2.0 event.

[Philip Woodgate]

Small world indeed. There is definitely a comparative lack of information for M's. The M Institute is a great idea. The national press is poor on SME's compared to large companies, but it’s the M's that really lose out. I'm involved with many M’s so it really is a constant source of annoyance for me.

There’s some really good information on the web for S's I see no reason why the same shouldn't apply to M's. There’s a new goal for SME Blog – what do you think?

[Stuart Jones]

Good luck with your pursuit of the Ms. My target is the 1,074,000 other Ss which aren't one person businesses. Perhaps we need a new acronym to distinguish beween the three groups. PSME? Personal, Small, Medium?

[Philip Woodgate]

Hi Stuart. Good to have you back. Acronym's have their uses, but sometimes we need to drill down further. I see what you are saying about PSME, but I think I'm still safe with SME for SME blog.

[Malcolm]

Very interesting! Refining the acronyms really seems worthwhile since "As we write and talk, so we think". Obviously managerial decision-making and control issues are quite different for sole-proprietor/no-employee firms than for multi-owner/multi-employee firms ... and, of course, different again from sole-proprietor/multi-employee firms, etc.

To me one of the most important outcomes of getting our business taxonomies right is that we never collect data until we define the business units for which we're collecting data. And without such data, we don't really know much of anything about certain classes of businesses (as you all suggest!). This means government policy and things like business credit policies might be less than economically efficient.

In the states we have data on revenues, wages, employee counts, and firm counts by "standard industrial code" (now "NAICS" code) by a finely graded series of *firm employee count sizes*; running from 1 employee to 1-4, 5-9, 10-19, 20-99, 100-499, and 500+. So in the states the only apparent problem is in the industrial coding of firms; i.e., how best to develop a taxonomy by economic characteristics such as production inputs, production functions, or production outputs.

So ... it seems this would be a really good discussion for someone to continue. Perhaps we even need a meta-taxonomy with which to start (i.e., a taxonomy of the entrprise taxonomies we need)!

[Philip Woodgate]

Hi Malcolm

It's notable that you mention the industry definitions. The UK doesn’t have the same industry classifications for SME’s and as a result the information is less available. In fact I can’t find the split of my 26,000 M’s on our governments DTI website by industry sector. I can find it by SME or large companies, but not M’s. I'll keep looking - it's probably there, but buried amongst other SME data.

Your comment on the connection of government policy and data collected is particularly fascinating. Good management needs relevant, up to date information with which to make decisions and that must be the same for governments and policy making.