Laura Tallett 20 April 2017

“Let’s avoid using the term SME – it’s not reflective of such a broad group of businesses and they don’t refer to themselves as that.”

This was a comment I heard from one of my clients recently, and on reflection I think she’s probably right. Why are we still referring to small and medium sized businesses as a collective ‘SME’ group, when these businesses are so varied?

The European definition outlines that “the category of micro, small and medium-sized enterprises (SMEs) is made up of enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding 50 million euro, and/or an annual balance sheet total not exceeding 43 million euro.”

We all know, based on the Government and media attention it’s been given, that the ‘SME’ marketplace has grown enormously over the last few years. With over 99.5% of businesses now placed in this ‘SME’ bracket, it seems odd that we continue to label them in this way; in such a broad category, a label becomes largely meaningless.

It’s a growing and broad ranging category

In the PR world, a business the size of 50-100 employees is large. In finance, an institution of 5,000 employees would be large, and 50-100 would be quite small. And, there’s the problem.

It’s not just the size and revenue we should be focused on. It’s the style and structure that defines a business too – and this can vary wildly depending on sector and customer need.

A mid-sized construction business may be out on their client’s site every day, with a team of employees defined in size by the job at hand. A service-based finance business could have 30 people based in an office or on the road visiting clients each week. There’s also a huge void between a larger 250-person business and a ‘one-man band’. They act differently, they work differently, they digest information and look at the world in a different way.

We are increasingly hearing about entrepreneurial leaders creating new businesses, with high growth aspirations. These ambitious leaders are technology-led (many in the future will be those Millennials who have grown up with technology at that their finger-tips), and action orientated – if you don’t do it yesterday someone else will today, that’s their moto. And, they are fast at delivering new ideas and results.

There are many businesses like these that are ambitious and focused on high growth; yet others operate as a lifestyle business and are happy to tick along and never grow.

Understanding them and what they need is key

We work with businesses looking to raise their profile and credibility with key stakeholders and end customers, and we have a wide range of clients from finance providers and professional services firms through to manufacturing providers looking to engage ‘SMEs’. Some of their customers are one man bands, others a larger office network with perhaps a bank of part time workers / freelancers utilised, based on supply and demand of the work.

To effectively target this majority group of businesses we need to further segment it to identify those different styles of businesses and who the decision maker is. Some may be owner run, others will have effective support functions – finance, HR, marketing. The larger more established may have a board including a CFO, CEO and key operational leaders.

Understanding what the audience needs, their business challenge and developing a clear marketing and PR strategy to reach them needs careful thought and insight into that specific market. This is one common theme that will always remain. Who is the decision maker, what do they want from you, how can you drive action and change? These are all critical questions that need to be asked.

Competition has grown enormously in all business and sector markets, and this means you need to be better and smarter than ever before. When it comes to communications all businesses need to stand out from the crowd. They must be nimble, flexible, engaging and brave.

No one likes to be white washed under a label. It is time for redefinition and stop labelling these businesses together as ‘SMEs’ and think about the other key features that define them and differentiate them. After all, they are the future of the economy.