What Is The Difference Between Micro, Small and Medium Enterprise?

In recent years, many countries rely on the micro, small, and medium enterprises (MSME) to boost their economy despite facing economic problems. It is considered significant to have these enterprises in the form of food packaging, machineries, textiles, health clinics, and more. In addition, MSMEs are considering its position as an economic pillar that creates 90% of jobs in the world economy. However, what is the actual difference between micro, small, and medium enterprises? Read further for more details!

General Characteristics of MSMEs

The MSMEs are businesses that run individually or in groups on a scale that is still relatively small compared to international corporations. The main characteristics of MSMEs are:

• Have less entrepreneurial experience and are more focused on implementation.
• The type of business commodities are not always fixed.
• Business locations usually change once in a while.
• The business is still small scale, but has the desire to grow.
• MSMEs try their best to make money by doing various jobs.
• Mostly, the businesses do not have a business license or other legal requirements.

The Difference Between Micro, Small, and Medium Enterprises

Currently, there are still many people who don’t know the difference between micro, small, and medium enterprises. In fact, between these types of enterprises, there are several quite basic differences.

Startup Investments

The difference in MSMEs can be determined by the amount of capital when setting up the business. This has been further regulated in government regulations, to facilitate business licensing. The size of the basic capital criteria set by the government for MSMEs has increased compared to before. The increase is intended to encourage business actors to have higher competitiveness. In India, for example:

• Micro Enterprises— up to 1 crore
• Small Enterprises— 1 up to 10 crores
• Medium Enterprises— up to 50 crores

Turnover

Turnover can basically be interpreted as income generated from business sales, whether on a daily, monthly, or annual scale. The higher the turnover, the bigger the business. Hence, this will continue to be monitored, so that the company can see how their business is developing. That way, it will be easier to develop strategies to achieve maximum profits. Another example from India’s MSME:

• Micro Enterprises— under 5 crores
• Small Enterprises— up to 50 crores
• Medium Enterprises— 50 up to 250 crores

Number of Employees

The number of employees is also a determining factor in the differences between MSMEs. The more employees, the bigger the business. This is India’s MSME:

• Micro Enterprises— 1 up to 10 employees
• Small Enterprises— 10 up to 50 employees
• Medium Enterprises— 50 up to 250 employees 

Final Thoughts

That’s some information about the difference between micro, small, and medium enterprises. They can generally be differentiated based on initial investments, turnover, and number of employees. Hopefully in the future, we can continue to support the existence of MSMEs around us. Perhaps, you have other important information that can be added here? Please share your information in the comments section below. Your information will be very meaningful for those who need it.