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Definition Of Small And Medium Enterprises

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Definition of Small and Medium Enterprises The distribution of firms in the private sector according to their age, measured by the number of years they have been in operation. The effect of the business environment on firm performance may depend on firms’ experience and longevity. Also, older firms and young firms may differ in their ability to successfully navigate the business environment (World Bank ES2015). Small and medium-sized enterprises (Small enterprises) are a very heterogeneous group of businesses usually operating in the service, trade, agri-business, and manufacturing sectors. They include a wide variety of firms such as village handicraft makers, small machine shops, and computer software firms that possess a wide range of sophistication and skills. Some are dynamic, innovative, and growth-oriented while others are satisfied to remain small and perhaps family owned. Small enterprises usually operate in the formal sector of the economy and employ mainly wage-earning workers. Small enterprises are often classified by the number of employees and/or by the value of their assets. The size classification varies within regions and across countries relative to the size of the economy and its endowments. It is important to note that there is a minimum as well as a maximum size for Small enterprises (Lukács, 2005). Overall, Small enterprises could be defined and classified taking into consideration: quantitative, qualitative, and both quantitative and qualitative
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