BrandFresh Magazine

Many definitions exist to differentiate between micro, small and medium-sized businesses. However, there is no global agreement on the definitions, due to differences in the economic structures of countries.

Most countries utilize the state’s defi­nition of these businesses for extending credit, hence the different classifications amongst countries.

The European Union (EU) defines micro, small, and medium-sized enterprises (MSMEs) as businesses that employ between 1 and 249 persons and have up to 50 million Euro in annual turnover. However, to be so classified, these companies must have a maximum of 43 million Euro in their balance sheet total.

The United States of America defines MSMEs according to the number of employees the organization has, except for the non-goods producing sectors.

The World Bank has strict definitions for micro enterprises, small businesses, and medium-sized enterprises. They define a micro business as an organization with less than 10 employees and annual sales not exceeding US$100,000 and total assets not more than US$100,000.

A small business as defined by the World Bank is an enterprise with less than 50 employees, sales less than US$3 million per annum, and total assets less than US$3 million. The definition of medium-sized enterprises as defined by the World Bank are those organizations with 300 or less employees, annual sales of less than US$15 million, and total assets of less than US$15 million.

In Jamaica, MSMEs have several definitions. The Small Business Association of Jamaica (SBAJ) uses the number of employees and total sales as their benchmark. The Private Sector Organization of Jamaica (PSOJ) solely uses total annual sales as their base for defining MSMEs. The Planning Insti­tute of Jamaica (PIOJ) defines MSMEs based on total sales and total assets.

However, the Ministry of Industry, Investment and Commerce (MIIC) uses total annual sales and the number of employees as their criteria for defining MSMEs. Their policy formulation (2013) describes a micro business as having five or less employees with a maximum annual turnover of J$10 million.

A small business is classified as having 6 to 20 employees and having annual sales of over J$10 million but less than J$50 million.

And a medium-sized business is classified by MIIC as having 21 to 50 employees and annual sales of over J$50 million but less than J$150 million.