Know her classification of companies, helps you to know that if you are thinking of starting your own business, if your company will be classified as an SME or a medium or large company according to its size.
Criteria for the classification of companies
- The classification of companies can be made according to size. Nowadays, according to their size, there are micro, small, medium and large companies.
Micro, small and medium-sized enterprises make up those known as SMEs.
- But the criteria can also be applied according to the level of turnover of the company, therefore they can be classified according to the income that the company obtained from the sales of the product.
- Under a patrimonial criterion, its patrimony is taken into account to classify a company, which integrates both the obligations and the rights and assets acquired.
- A broader criterion that can be applied is in terms of organization, that is, the number of employees the company has is taken into account.
The classification of companies according to size
The size of the company is determined using different criteria, for example:
- According to the number of employees working in the company.
- Depending on the company’s line of business, that is, its activity,
- Based on the number of sales the company made in a year.
Classification of industrial companies
Industrial companies are classified into:
- Extractive when the extraction of renewable or non-renewable natural resources is its main activity.
- Manufacturing when they are dedicated to the transformation of raw materials to give rise to the finished product.
- Agricultural when they are dedicated to exploiting livestock and agriculture.
Classification of large companies
Large companies are classified in this way due to several factors such as:
- They own their facilities.
- the turnover of large companies amounts to millions of dollars.
- The number of employees is not less than a thousand.
- its operation and administration system is advanced.
- Its employees are unionized.
- They access credit lines.
- They have the ability to obtain high financing.
- They have the capacity to obtain important loans from both national and international financial institutions.
- A society made up of partners is formed, who are in charge of contributing the capital.
- They can settle with economic partners who will participate in the marketing and production of the products.
- They can dominate the domestic market and also participate in the international market.
- Capital resources are extensive, so that society can automate and mechanize its production by applying state-of-the-art technology.
- The administration is carried out by professionals, often answered by universities or scientists.
Classification of companies: microenterprises
Smaller in size, microenterprises are characterized by:
- They have an artisan manufacturing system.
- All the material used to manufacture the product including equipment and machinery are basic.
- The administration of a micro-business is also basic.
- It is usually a family organization.
- The capital is contributed by the owner.
- The owner is the one who manages the company.
- It is faced with supplying a small market, sometimes regional or local.
- You can hire employees or those who work are your own relatives because it is a family business.
- Production is elementary.
- They do not have access to significant financing.
- Sales are reduced to the basic necessities to cover expenses of the owner’s few personnel and subsistence.
- The owner can be the owner who can even dedicate himself to personally serving customers.
- Its employees are few or nonexistent because the owner is in charge of production and administration.
Small Business Classification
Small businesses are classified as such if they meet certain criteria such as:
1. Usually a small business is an independent entity.
- The small business is created to obtain basic profitability.
- A small business is not necessarily predominant within its industry.
- The annual income of a small business has a limit that does not reach a million dollars.
- The number of workers in small companies does not reach the number that would categorize them within a large company but does not reach 1,000 employees.
Classification of medium-sized companies
- Medium-sized companies generally have at least 100 employees and rarely hire 1,000.
- In turn, their employees are generally unionized.
- The medium-sized company has a well-defined administrative system with its functions and responsibilities.
- The systems of medium-sized companies are automated.
- The partnership is established by one or two people who provide the capital.
- The owners are the ones who run the company.
- The market supplied is broader compared to a small business.
- It can supply not only the regional and local market but also the national one with prospects of supplying the international market.
- In fact, in the same way that the small company envisions the possibility of becoming a medium-sized company and the latter envisions becoming a large company.
Classification of companies by size
Therefore, the classification of companies by size, taking into account the number of workers it hires, is as follows:
- For a company to be clarified as large it must have at least 1000 employees.
- A company is classified as medium if the number of employees that work in it exceeds 20 but does not reach 100 hired.
- A small company is classified as such if the number of employees does not reach 20.
- The microenterprise is small and the number of employees hired does not reach 10.
However, as to classify a company according to its size, in addition to evaluating the number of workers it has, the annual income per sale and the balance sheet are also evaluated, it is defined as:
1.Microenterprise when the balance sheet results in a value less than two million.
- The annual sales volume is less than two million.
- The number of workers is less than 10.
- Small business when the balance sheet shows less than 10 million.
- The annual sales volume is less than two million.
- The number of workers is less than 50.
However, the number of employees or the values in terms of annual sales and the value of the balance sheet may vary from country to country, but in general basic characteristics are shared.