It so happened that in Russia it is not customary to isolate medium-sized businesses as an independent subject of economic relations. Speaking more often of business, they unite medium and large business or small and medium, as if there were no separate medium-sized enterprises at all. But this is not so, and moreover, it not only exists, but also has differences.
Medium Business Criteria
There are several basic criteria by which you can determine the average business. These signs include:
- number of employees;
- enterprise turnover;
- market share;
- managment structure;
- marketing functions.
Number of employees
The main criterion for the size of a business is the number of employees employed in it. To facilitate taxation, a clear boundary has been set for the number of employees in the enterprise, at which it is considered small - from 15 to 200 people. Unfortunately, for large enterprises, such a restriction does not exist at the legislative level. But it is generally accepted that a large enterprise is considered if more than a thousand people work in it. This means that enterprises with the number of employees from 200 to 1000 are medium-sized businesses.
Company turnover
The turnover of the enterprise is also an important criterion for its size. Unfortunately, the turnover of companies has no boundaries established by law that would divide them by size. And this is understandable, because the income of companies can vary depending on many factors, for example, the financial situation in the country. Which income is considered low and which is high is determined only by the average income among all companies at the moment.
According to 2016, the conventional border of a large business is characterized by a turnover of $ 150 million. Small businesses have clearer boundaries: companies with a turnover of 15 million rubles (557 thousand dollars) can legally apply for simplified taxes, therefore, this is the border of small business. And so it turns out that all enterprises with an annual turnover between these borders are medium-sized.
Due to the large difference between the maximum and minimum figures when dividing by turnover, intermediate business sizes arise: medium-small (with a turnover of up to $ 12 million) and medium-large (with a turnover of more than 50 million). Therefore, it is not possible to clearly separate the size of the turnover; it is only possible to say for sure that enterprises with an income of 12 to 50 million dollars are medium-sized businesses.
Market share
Market share is also an important criterion for determining the size of a business. Small business - a share of 0.5% or less, large business - more than 5%. However, this discrepancy is very large and again intermediate sizes arise: from 0.5 to 1 and from 2.5 to 5.
Market share is a relative indicator, and therefore allows us to solve the problem of the incomparability of the first two criteria. But here there are pitfalls. The fact is that different markets differ in concentration, and while in one market 2-3 large players control everything, in the other everything is divided between many small ones.
Managment structure
Everything is simpler here: if the company is managed directly by the director or through one link of deputies, this is small business, if links 2-4 are medium-sized enterprises, 5 or more are large.
Of course, here it was not without its nuances. For example, companies in which the presence of one management link is specific.Differences are also determined by the different approach of the leaders: someone considers it right to pile up useless pyramids of links, and someone, on the contrary, tries to limit himself to a minimum of control levels. But all this is more an exception than a rule, and that is why this criterion is the most accurate.
Marketing features
Marketing functions are more a process of the management structure than an independent criterion, but it is worth mentioning separately, since it is here that the boundaries are set out especially clearly. The essence of the method of isolating medium-sized businesses is to determine who makes marketing decisions.
If the company is small, the director is directly involved in advertising. Maximum - he may have an assistant, but the final decision will still be made by the head of the organization. When medium-sized business is developing, a separate specialist or a whole department should deal with this issue. In large companies, there should be a special department with a marketing director at the head.
Medium Business Support
Financial subsidies from the state are the most important factor in successfully developing medium-sized businesses. In addition, it is financial support for start-up businessmen that is the main indicator of a well-built economy in the country.
Why is financial support of medium business by the state so important for businessmen and the state itself? For entrepreneurs, such assistance is necessary due to the inability to stand on their own at the beginning of the journey, because it is then that enterprises need the most basic investments. It is important for the state to support entrepreneurs, because by creating various programs in support of business, they will inevitably join forces at the departmental level. In addition, the presence in the country of a large number of small and medium-sized enterprises creates a stable business climate.
As for the support of medium-sized businesses in Russia, now things are going quite well. The authorities of each individual region of the country organize comprehensive measures to support medium-sized businesses in Russia. Today, there are many different types of subsidies for medium-sized enterprises.
The main types of subsidies:
- Financial support for companies.
- Simplified licensing.
- Help with advertising.
- Reimbursement of leasing or loan costs.
Any program to help businessmen has a validity period limited by funds allocated to it.
Also worth mentioning are funds to support medium-sized businesses, both commercial and non-profit. Here are their main types:
- Surety and guarantee funds (provide guarantees and sureties, as well as help in obtaining soft loans).
- Business incubators (allow enterprises to work and develop on their territory).
- Business schools (serve to improve the skills of managers and employees).
- Investment funds (provide investments to medium-sized business owners).
- Venture funds (enable enterprises to invest in different areas at the expense of the fund).
Lending to medium-sized businesses
According to statistics, 30% of small businesses are closed after a year of work due to high competition and lack of funds. A solution to this problem may be lending on favorable terms (low interest rate and long term payment).
Unfortunately, the law “On the development of small and medium-sized enterprises in the Russian Federation” does not provide for lending to medium-sized businesses on special conditions. The solution to this problem falls on the shoulders of local governments and banking institutions. The lending rate for small and medium-sized businesses is constantly growing, but it is still at 15% satisfaction of the needs of enterprises.
Of course, the financial crisis left its mark, but the main problem now is the distrust of banks in private entrepreneurs. Due to the lack of reliable collateral, lending to medium-sized businesses is considered unreliable. To get a loan, an entrepreneur must observe two points: have a clean credit history; engage in business for at least six months (or three months for trading enterprises).
The main indicator for granting a loan is evidence of business liquidity. However, even in their absence, borrowed funds can be obtained, but a little later or to a lesser extent. The average loan size for medium and small businesses is from 50 to 300 thousand rubles, such a loan is issued for a period of up to one year without collateral. For a larger amount, you will have to provide a security deposit (real estate is especially valued).
