There are several ways of categorizing a business to serve different purposes. A business may be classified as small scale for tax purposes and classified as medium scale for its number of employees. Also, a business could be categorized based on its ownership, nature of business, market and many more criteria.
In this article, we aim to talk about one such categorization of enterprises-based on scale.
How to Measure the Scale of an Enterprise?
Categorization of scale of an enterprise is not a standard measure. There could be factors that comes into consideration, such as; number of employees, turnover, profits, market share, number of customers/suppliers, production capacity, technology utilization and many more.
As a standard norm, based on the number of employees (which is an accepted measure of scale of an organization around the globe), below are the benchmarks to decide scale;
- Large Scale Enterprises: People more than 250. (Consists 1% of all enterprises in the world)
- Medium Scale Enterprises: People between 50 to 250
- Small Scale Enterprises: People less than 50
As a basis of revenue, a standard measure of scale is as follows;
- Large Scale Enterprises: annual revenue over $1 billion
- Medium Scale Enterprises: annual revenue $10 million - $1 billion
- Small Scale Enterprises: annual revenue $5-$10 million
Geographical spread;
- Large Scale Enterprises: could be spread internationally
- Medium Scale Enterprises: spread across several cities of one country
- Small Scale Enterprises: mainly one location within one country or city
Technology adoption;
- Large Scale Enterprises: heavy reliance on advanced technology
- Medium Scale Enterprises: moderate level of technology integration to day-to-day processes
- Small Scale Enterprises: little to no technology utilization. Most work is done manually.
However, these categorizations and definitions could vary largely from country to country. For the closest benchmark, a country's national statistics should be used as a tool of measure. For an example, a large scale enterprise in Thailand could be a small scale venture in the United States.
