Today we are going to talk about What is an SMB? Small-medium business So I have this conversation today, and someone asked me what is an SMB? I find it out and found out what it means 2 things –
1. a lot of people don’t know what does it means? And 2. there is a lot of disagreement with what it means.
So, first of all, let’s see what is it?
So SMB stands for Small-Medium Businesses. That is small as it really means that’s kind of used as a business based on a little bit less used designation that any government try to fund those small businesses and categorizes it in some way or such as that kind of stuff.
Well! In most businesses, we try to deploy so that we have some idea of ways of communicating right! We need to know the working SMB segment to be just SMB as just SMB is behaving differently whereas enterprises forex.
So how do we define SMB? Well! We can’t define it as it is really very hard and all knows what is meant by small medium business and small-medium business or SMB can be used interchangeably.
SMB is just the quick designation. Typically we will see SMB being a company that is formed by 10 to 500 dollars. Of course, you will find people who will disagree with that. Some people may say it’s from 1 to 2000 or the places like IBM find SMB as a starting up by 100 or less than 500 simply not being a business.
But generally, the most common definition that I come across is that 10 to 500 dollars with a small office or home office taking 3 to 10 persons. 1 and 2 people are generally not considered for it. Because they don’t have the right to it. So they are not even like so and then above SMB is SME range which might be something like 500 to 2000 people then comes medium businesses, large businesses and eventually the enterprise which is mostly the fortune 500.
The reason that we have these designations especially with an IT because we tend to see the pretty typical behavior patterns that are shared within these quirks and nothing is generated and that’s why we don’t always use the number of people as a guide and I should also point out that this is only for-profit traditional businesses, things like nonprofit and Government agencies do not found to these designations regardless of their size.
They may share characteristics with each other with the companies in the size ranges but they also have characteristics that are not normal to them. So we don’t use designations in such cases.
Your local village government might find 10 people and they both never so-called original SMB it simply operates differently and those things will be confusing.
So what we generally find is that people below the so-called horizon 1 or 2 person businesses typically have no idea at all. This so horizon range from 3 to 10 people below. We think of this Microsoft active directory threshold.
These are the number of people that you just kind of match everything manually. There are exceptions but generally, this is how they behave. They have very simple IT needs and what little bit they have they generally don’t automate. They also don’t have to run their own IT staff. It always brings it for them from the outside because they use so few IT solutions it’s crazy.
But they share that unless they are startups. You almost never find this that violates that unless they are startups because startups might be 2 people that have a lot of needs that are expecting you may say, 50 people, it may be 2 months.
So startups are kind of just refer to them as startups or as SMB’s are becoming or tend to have relatively similar needs between them. They only need some amount of management that they can rely on manual work and it’s appropriate that they try to automate but automate very little. So they may need some control systems like Microsoft active directory has 10 people working.
Today active directory is no longer than a guide. We don’t use it that way but that’s kind of a foundation for where the number came from traditionally.
And what we found across the board is pretty much around 500 people behaviors through an SMB and SME. So if you change, you start needing more than a single full time IT resource that doesn’t mean that you have to hire and have a certain discussion so the time that’s needed you started needing a dedicated work focused applications line of the small-medium business structure take over and some infrastructure things like that we see behavioral changes along these lines.
Now things that also ready to include really heavy items we focus on IT from the point of SMB or not. You can definitely have a personally 300 people company that has 300 people that has a huge investment that really works heavily, is focused on IT, business apps, and all kinds of things we might not consider them as an SMB because their behavior doesn’t follow in that range. But if we have a company which has got 1000 people in SMB.
So sometimes we find those numbers a little bit that just gives us guidelines and ideas of what we are talking about so that we can easily share concepts between people.
The other things that influence this are revenue. There are some average revenues for companies with 300 people. If your revenue is 3 or 4 times larger than the average, you might start considering yourself as SME even with fewer people. Some with larger revenue change your behavior change your investing technology rather than simply using it to meet comparative advantage.
Or you are having extra staff because of simply one thing automated whatever because you have the investment capital to do so.
So revenue often a big factor. I have worked in companies as small as working 100 that were categorized as either larger or enterprise business simply because of investment capital was in the fractions of trillions its how it’s measured 100’s upon 100’s trillion dollars of revenue with only 1400 people all these kinds of things will change the behavior of the company. And their IT staff was more than 450, 4 times internal IT, not numbers you expect.
And is something being normally is categorized as an SME in other circles so, that revenue was very influential and taking that one out of its normal place and I have also seen enterprises that make closing in on 10 or 20,000’s staff but with behavior is very much same to the SME know the very little line of business, very little investment, very little technical knowledge it happens right!
But in general, you are going to find each category as well. One of the reasons that we need that utility is so that if your experience for ex:- if you are working for an SME IT which is the largest IT category.
The skills and experience that you have are going to be far more applicable to other SMB’s and it’s going to be SME’s medium or enterprises so if you are an enterprise looking at the fortune 100 example they typically want to find other people with experience in the fortune 100 because those people are going to more likely to understand the way either they work and understand the culture and the way their environment around, as opposed to the people coming from the outside SMB who may be pretty shocked to find their IT in the enterprise space while technically overlapping some technology, is nothing like what you used in the SMB. The world really does change significantly inversely sometimes like the enterprise or the SMB may look for the people from the opposite end of the spectrum because they want to breathe fresh life into their project.
I would appreciate certainly the enterprises that are from where people directly from SMB can be excited to get people who do endless work and do less focused.
Sizes of the businesses based primarily on their behavior but simply can’t be knowing the behavior company we don’t work at, we typically use the size of the company and the number of people with them employees too kind of define that.
I should mention that we use the number of people we do also then generally categorize that the number of people who use computers vs don’t.
You may have a factory you may have a thousand people but only 50 of them have the computer, we will still categorize them as an SMB in 9 out of 10 cases.
Whereas if you are a 1000 person company and you have 1000 people all doing work i.e. technical work such as financial and accounting something like that we may easily categorize you as SME or medium business based on the intensity of the working using the IT infrastructure.
So those are some factors that may alter things in one direction or another.
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