You’ve been nurturing your small business for some time now, and your hard work is starting to pay off as your business grows. Yet you might be starting to wonder at what point your small business becomes a medium enterprise. Keep these signs in mind to decide if your small business has grown into something larger.
You Meet the Federal Criteria
The United States Small Business Administration provides information on what the government considers a small business. They use the total number of employees, total revenue, or both to decide what’s classified as a small business. Yet each industry has a different standard, and even sectors within each industry will use different criteria to determine business size classification.
For example, if a sporting goods store makes over $15 million in annual revenue, it’s considered a mid-size business, yet a bookstore needs to make over $27.5 million for the same classification. On the other hand, if a greeting card publisher has over 1,500 employees, it’s now a medium enterprise. While the size standards are confusing, if your business is close to the top end of the range, you can call yourself mid-size.
You Deal in Multiples
Demand for your product or service is so high that you’ve opened multiple locations to serve all your customers. These locations could be in the same city, in different parts of your state, or possibly even in other parts of the country. Or your business is so popular that you’re dealing with multiple currencies because you have vendors and customers from multiple countries all over the world. Regardless of the scenario, if you’re now dealing with multiples in your business, you have grown from small to medium.
You’ve Expanded Your Team
At first it was just you running your business. Then you brought in a salesperson to help sell your product or service. After that, you needed a customer service representative to assist customers after the sale was over. Eventually, you needed help with accounting, fulfillment, invoicing, and more. Perhaps now it’s just not one person; it’s an entire team of people supporting and growing your business. One sure sign that your small business has now become a mid-size business is that you’ve had to expand your team and hire more people to help you.
You Need to Scale Out Software
Along with adding more people to your team, another sure sign that your small business has grown into an enterprise is when you need an outside company to provide security for cloud services. While cloud computing offers many advantages including lower costs, increased flexibility, and ease of collaboration, it also comes with security threats. Once your business gets to a size where you realize you can no longer handle security on your own, you can say you’ve moved up to a medium enterprise.
While the classifications might vary from industry to industry, if your small business meets these signs of growth, it might be time for you to start calling it a mid-size business instead.