SMEs have been considered as they frequently face barriers of entry when trying to win business with large organisations. TfL has defined Small and Medium Enterprise as follows:
A Small Enterprise is a business which has both the following:
i) 0-49 Full Time Equivalent employees1; AND one of the following: EITHER
ii) Turnover2 per annum of up to £6.9 million (up to 10 million euros3): in the last financial year. OR
iii) Balance sheet total4 of up to £6.9 million (up to 10 million euros3).
A Medium Enterprise is a business which has both the following:
i) 50-249 Full Time Equivalent employees1; AND one of the following: EITHER
ii) Turnover2 per annum of up to and including £34.3 million (up to 50 million euros3): in the last financial year. OR
iii) Balance sheet total4 of up to and including £29.4 million (up to 43 million euros3).
A Large Enterprise is a business which has both the following:
i) Over 250 Full Time Equivalent employees1; AND one of the following: EITHER
ii) Turnover2 per annum over £34.3 million (over 50 million euros3): in the last financial year. OR
iii) Balance sheet total4 of over £29.4 million (over 43 million euros3).
The development of TfL's SME definition was derived from the Companies Act of 19855, the European Union (EU)6 updated definition and the Department of Trade and Industry's (DTI)5 definition for SMEs based on adaptation of the EU definition.
1 Full Time equivalent employees are expressed in hours per week. TfL refer to standard UK hours of work as full time workers - i.e. those who work 35 hours a week and 52 weeks a year (including annual leave)
2 Turnover is in line with that defined in the Companies Act 1985. The amounts derived from the provision of goods and services failling within the company's ordinary activities, after deduction of i) trade discounts ii) value added
3 Based on the exchange rate £1 = 1.46 euros
4 Balance Sheet Total is refer to the value of the company's main assets
The lack of and the need for a definition Micro Businesses, the very smallest businesses in our communities, have particular challenges and particular importance in our society. They are the key source of economic activity in deprived and rural areas, they are the group in which all new businesses start, and particularly relevant now, they are the most likely source of employment for those falling out of the public sector retrenchment. As a guide, more than two thirds of busininesses in the UK employ fewer than 5 people and have a turnover of less than £250,000. They represent more than 15% of the economy. They need to be defined to be consistently supported across all government departments.
A BAME business is one that is owned, by 51% or more, by one or more Black, Asian or Minority Ethnic groups. Minority Ethnic groups are people who come from ethnic groups other than 'White British' These groups include the following:
Black or Black British: Caribbean, African and any other Black background
Asian or Asian British: Indian, Pakistani, Bangladeshi and any other Asian background
Chinese or other Ethnic: Chinese and any other Black background
White Ethnic: Irish and any other white background origin
Mixed Ethnic: White and Black Caribbean, White and Black African, White and Asian and any other mixed background
Under-represented groups are part of TfL's definition, and include suppliers from protected groups for which either protection is provided by anti-discriminatory legislation [such as Disability Discrimination Act (DDA 1995) and Sex Discrimination Act (SDA 1975 & 1996) and/or any diverse groups are not already covered by the other sub-groups. These groups include:
Women. Disabled people. Lesbians, Gay men, Bisexual and Transgender (LGBT) people and: Older people (aged 60 or over) and younger people (aged 24 or under)