What Are The Characteristics Of SMEs That Differ From Big Business?

Table of Contents

Small and medium-sized enterprises are different from larger corporations in many ways. Because of these differences, small businesses also face unique challenges. Small businesses tend to have more failure rates than large businesses, and they also struggle with growth because of a lack of capital and access to investors. But this doesn’t mean you shouldn’t start your own small business if you feel it’s the right path. Read on to learn about the significant differences that set SMEs apart from big businesses.

SMEs Have Fewer Employees

Most small businesses have fewer employees than large companies. Depending on your business model, you may only need a few employees to get the job done. Regardless of how many people you need on staff, it is essential to note that you will need to do small business administration yourself at first.

You’ll likely be the marketing director, accountant, IT person, and janitor. You’ll also probably wear many other hats as your company grows. If you’re a team leader at a big company, you might be able to delegate many tasks to your employees so you can focus on your core responsibilities. But if you’re the one and only person working for your small business, you’ll have to wear all those hats.

SMEs Have Smaller Budgets

Medium-sized enterprises often have smaller budgets than large companies, while big businesses often have large contracts and projects worth millions. A small business is more likely to work with smaller clients with smaller budgets. But this isn’t always a bad thing. It can be an advantage, especially if trying to get your company off the ground.

Small businesses may find it easier to approach venture capital firms and obtain funding than larger ones. But remember that scaling once your projects are smaller can be more challenging. If you’re requested to work on larger, more costly projects, you may not have the resources to scale up to meet their needs and may be forced to take on business debts.

Start filling your sales pipeline today

SMEs are Inherently More Flexible

If your company is only one person or a handful of people, you don’t have a considerable staff turnover rate. As many large businesses do, a small business doesn’t have to adjust to a new team every year. This allows small businesses to change how they do things and pivot to new strategies more quickly than larger businesses. As a result, you’re inherently agile, flexible, and adaptable to change.

This can be a significant advantage when staying relevant in your industry. Larger businesses often have challenges adapting to change because they have larger management teams with many stakeholders, policies, and procedures.

SMEs Rely on Word-of-Mouth Marketing

Since smaller businesses have smaller budgets and smaller staff, it’s often difficult for them to do large-scale marketing campaigns that engage large audiences as large businesses can. As a result, many small businesses rely on word-of-mouth marketing and recommendations from their existing clients.

It’s a good thing because it’s a cost-effective way to generate business. It’s a bad thing because it often takes a long time for your company to grow and see results. You’ll likely see a slow trickle of new clients due to the nature of word-of-mouth marketing. You may need to take steps to speed up this process by actively promoting your business to potential clients and influencers.

SMEs often Struggle with Growth

Because medium-sized enterprises often rely on word-of-mouth marketing and have smaller budgets, they sometimes have difficulty growing. You may need to seek new clients and projects to grow your business. This is especially true if you’re a solopreneur or work in a niche market where word-of-mouth marketing isn’t as effective.

You may need to reach out to potential clients and pitch your services to them. You may also need to get creative with your marketing efforts and try to get your name out there in other ways beyond word-of-mouth. These challenges can sometimes make it difficult for a small company to grow.

Start filling your sales pipeline today

Small Companies are Disadvantaged when it Comes to Data

Large corporations often have access to more data than small businesses do. This can make it challenging for smaller companies to compete in specific industries. For example, large gaming companies often have access to massive data sets related to their users and game usage and can use this data to their advantage. They can use the data to understand better and predict how customers will behave, create better and more engaging games, and understand how to increase revenue.

Because small businesses don’t have the same access to data, it can be more challenging to compete with large gaming companies. This is mainly true if you’re trying to create a new game and don’t have the same data as larger gaming companies. You may not know what data you need or how to collect it. You may also not know how to analyze and use the data.

Liability of Owners

The other characteristic that makes larger companies more legitimate is that ownership is a company-owned enterprise. However, small businesses are not a company; they are individuals who decide to run their affairs. If you take control over your business, it’s your decision whether or not you will make it a big business.

Start filling your sales pipeline today


Being a small business owner is incredibly challenging. There are many advantages to being a small business compared to a large corporation but also many disadvantages. But if you’re passionate about your industry and have a good idea for a business, don’t let these challenges deter you from pursuing your dream. Here at Kennected, we offer marketing software that allows large and small companies to send personalized messages to prospective customers. Please get in touch with us for more information.

Schedule a Demo -
Grow Your Business

Subscribe For

Get started with Kennected today!