SECURITY APPLICATIONS

Security Applications Within Small Medium Businesses Or Enterprises (SME)

Security Applications Within Small Medium Businesses Or Enterprises (SME)

Introduction

More people than ever are thinking of starting their own business, either because they want more control over their lives and career, or because they are unable to find work elsewhere. As entrepreneurs they are establishing small businesses. A small business can basically defined as a business with a small number of employees. However, defining small businesses is not that easy. The definition of small business depends on many things like what industry the company is in and what country the company is located in. (Irwin, 2000, 66-88)

Two same sized companies might not be in same category for example the limit of employee numbers for SME's is 500 in Germany, while it is 100 in Belgium. But nowadays the European Union has started to standardize the concept. Its current definition categorizes companies with fewer than 50 employees as 'small' and those with fewer than 250 as 'medium'. Two same sized companies in the same country might not be in same category either. For example a company with 50 employees is considered as a small sized company if it is in transportation industry.

However, the same company would be considered as a medium sized company if it was in construction industry, and it would be a big sized company if it was in commerce industry.

Another criterion is sales revenue for a company.

To be considered as a SME, an agricultural company must have less than 0, 5 million $ sales revenue per year. However this number is 6 million $ for most retail and service industries and 27, 5 million $ for heavy construction industries. There are exceptions but most of the small firms have similar characteristics which are:

* Management and ownership is rarely separate. (Irwin, 2000, 66-88)

* Control over business operations and decisions reside with one or two persons, who are usually family members.

* The equity in the business is not publicly traded.

* The personal security of the owners is required to secure business debt. Limited liability is rarely present.

* The level and number of formal contractual relations are kept at a minimum level.

* Personal objectives of owners will guide and directly influence business decisions.

Explanation

Importance of SME's

A large company might be a lot bigger than a small company in size but when it comes to contribution to the economy it's the other way around. Small businesses are extremely important for the overall economy. A strong SME sector provides a strong foundation to increase standards of living and to reduce poverty. The importance of small businesses comes mainly from it's presence in the overall number of companies, its contribution towards employment and to the generation of new ideas. Here are some very impressive numbers showing how important small businesses are: (Irwin, 2000, 66-88)

* There are more than 25 million small businesses in the United States.

* Small businesses represent more than 99% of all firms and 99, 7% of all employees ...