Definition used Manufacturing 200 employees or less Construction 20 employees or less Road transport 5 vehicles or less Retailing 50 000 pounds turnover per year or less Miscellaneous services 50 000 pounds turnover per year or less. Criticisms of the definition The Bolton Report definition of what a small business is, is criticized as follows a) Low market share is not always a characteristic small firms can operate in highly specialized niches, or limited geographic markets, where they have a relatively high market share. b) Independence is difficult to measure considering that even in small family businesses, members of the family need to be consulted when it comes to critical decisions. European Commission Definition The European Commission (EC) initiated anew set of definition of the Small and Medium Enterprise (SMEs). According to the EC, the SME sector consists of a) Micro enterprises These are enterprises employing between 0 and 9 people. b) Small enterprises These are enterprises employing between 10 and 99 people. c) Medium enterprises These are enterprises employing between 100 and 499 people. This definition excludes agriculture, hunting, forestry and fishing. While the European Commission definition oversimplifies matters, it does reflect the changing management environment of an enterprise as it reaches key stages in its growth. Businesses with less than 10 employees rarely need a middle management structure, but over that size, there is often pressure on the owner to delegate more of the decision- making functions. Zimbabwean definition Zimbabwean definition of SMEs is borrowed from both the Bolton Report and the European Commission definitions. It is more of a quantitative definition than anything else. The Small Enterprise Development Cooperation (SEDCO), a Parastatal charged with the promotion of SMEs in the country defines a Small Enterprise as one employing no more than 100 people with a fixed asset base not exceeding ZW$500 million. (Being reviewed)
