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Small and Mid-size Enterprise (SME): Definition, Importance, US, And Canadian SMEs

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Small-and-Mid-size-Enterprise

What are Small and Medium-sized Enterprises (SMEs)?


SMEs or small and medium-sized enterprises are defined differently around the world. The country in which a company operates contains information on the defined size of an SME. The size or categorization of a company as an SME can be based on a number of characteristics depending on the country.

Functions include annual sales, number of employees, number of assets in the company, market capitalization, or any combination of these functions. The United States also defines SMEs differently from one industry to another.

SMEs make up the majority of companies operating around the world. These are usually independent companies with less than 50 employees. However, the maximum number of employees varies from country to country. For most companies, the upper range is 250. In some countries, the total number of employees is 200. The United States defines an SME as one with no more than 500 employees.

Importance of Small and Mid-size Enterprise

Promotes flexibility and innovation


Many processes and technological innovations are attributed to small and medium-sized enterprises (SMEs). Since large companies tend to focus on improving legacy products to produce more volumes and realize overall dimensional economic benefits, these companies are not as flexible as SMEs.

To be successful, SMEs focus on creating new products or services. Therefore, they can adapt more quickly to changing market demands.


Small and Mid-size Enterprise play an important role in shaping a country’s economy. They can be seen as an attractive and huge innovative system. Due to the socially and economically beneficial effects of SMEs, the sector is considered an area of ​​strategic interest in an economy.

Create a more competitive and healthy economy

Small and medium-sized businesses encourage competition in product design, pricing, and efficiency. Without SMEs, large companies would have a monopoly in almost all areas of activity.

Support large companies

Small and Mid-size Enterprise help large companies in some areas of the business where they can best serve. Therefore, SMEs will dissolve immediately. Large companies will be forced to engage in more activities that may not be efficient for these companies. Activities such as the supply of raw materials and the distribution of finished products manufactured by large companies are carried out more efficiently by SMEs.

Governments also recognize the importance of small and medium-sized enterprises. Therefore, they offer regular incentives to SMEs, such as easier access to credit and better tax treatment.

Difference between small, medium, and large businesses

Politics


Due to the myriad levels of management, politics tends to play less of a role in larger organizations than in smaller ones. In small organizations, the owner of the organization may have long-lasting personal relationships with other employees or owners. Husband and wife teams are also common. For a person joining such an organization, it can be difficult to maintain the right relationships without alienating others who also directly influence the leaders.

Structure

Without a doubt, one of the clear differences between small and large organizations is the more bureaucratic and hierarchical structure. Due to the workforce in a large company, they are inherently more hierarchical.

The result is teams that work in silos or don’t understand the nature of the business. However, it also allows employees to specialize in their job description. Whereas in a smaller company, it is easier to interact with the decision-makers as they will probably be located a few feet apart.

In addition, it is also easier to make quick and reactive decisions, such as: B. to answer customer inquiries, giving small businesses an advantage over their larger cousins. Due to its often cautious nature, the larger company often delegates decisions to committees or subcommittees.

While you will have more time and resources to consider an answer, it will also take much longer. Where large companies have an advantage is in their resource capabilities. More employees, sources of income, and available amenities. Therefore, it is much easier for them to direct you to a specific problem.

Finally, the environment can be very different within the two different types. The structure of large companies is often littered with policy manuals, staff introductions, job descriptions, and meetings. In smaller companies, this is usually much more ad hoc. Employees have more freedom to do what they see fit.

Employees

The melting pot that makes up an organization’s roster is always interesting. Different views between large and small companies. Smaller companies tend to have a more diverse workforce, with young and old, different aspirations, etc. While in many large organizations the workforce can begin to take the form of the company itself.

This is the case with many who adopt the culture of the company. Those who think differently can be expelled, leaving an almost standardized and regulated employee. There is also a strong argument that large companies tend to attract those seeking job security. On the contrary, smaller companies attract those who want to work in different areas, and are looking for growth, change our willingness to take risks.

Salary

One aspect that few people disagree with is that larger companies tend to have higher salaries. However, this aspect is recognized by smaller employers, and many combats it by adding advantages, eg. Eg B. private healthcare to make your service packages more substantial.

Culture

One aspect that few people disagree with is that larger companies tend to have higher salaries. However, this aspect is recognized by smaller employers, and many combats it by adding advantages, eg. Eg B. private healthcare to make your service packages more substantial.

Perhaps one of the most obvious differences between the two types of organization is that of culture. For startups, any decision that is made can be dangerous, so they tend to be less risk-averse than larger established companies.

For large companies, a small percentage increase on an existing widget when it is already generating £ 500 million in revenue can make a difference. Therefore, large companies avoid risky decisions. Instead, they prefer to be more conservative and enhance what already exists with their existing customers.

Many large companies are now trying to find a way to maintain a small business mindset regardless of size. They recognize that elements such as long-term planning with an element of risk-taking will benefit them in the medium and long term.

Check out 50 Best Startup Ideas for 2021 including business plan

Small and Mid-size Enterprise SMEs in the U.S.

The United States adheres to different definitions of SMEs and policies, which vary from industry to industry. The practice corresponds to the North American Industry Classification System (NAICS). The system was developed jointly by the United States, Canada, and Mexico to establish a set of guidelines and standards that allow the collection and analysis of operational statistics in North America.

The United States Small Business Administration (SBA) is responsible for establishing a list of standards and characteristics that companies must meet to qualify as SMEs. The list is not specifically directed at SMEs, as it mainly refers to smaller companies.

Most SMEs, however, must comply with all the laws and guidelines on the list, including the requirements and operating rules established by NAICS. This is important, as many small businesses can apply for government contracts and financing, as long as they comply with all required regulations.

The United States also has a specific definition of SMEs based on the industry in which they operate. For example, if a company is part of the manufacturing industry, it can be classified as an SME if it has a maximum of 500 employees, but a company engaged in the wholesale trade can only have 100. There are also differences between branches of industry.

For example, in the mining industry, companies that extract nickel or copper ore can employ up to 1,500 people, while a silver mining company can only employ a maximum of 250 people to qualify as SMEs.

Small and Mid-size Enterprise SMEs in Canada

In Canada, Small and Mid-size enterprises are companies that employ less than 500 people. Companies with 500 or more employees are only considered large companies. Industry Canada, an organization that promotes economic and industry growth in Canada, assumes that small businesses have fewer than 100 employees if the business produces goods. The limit for small businesses that provide services is 49 employees or less. Companies that fall somewhere between these thresholds for the number of employees are considered SMEs.

Another organization, Statistics Canada, which is researching and collecting data on businesses and trade in the country, meets the requirement that SMEs have no more than 499 employees. However, based on the research and data collected, SMEs are also found to have gross sales of less than $50 million.

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Business

VIRTUAL ASSISTANT BUSINESS: 2021 Detailed Start-Up Guide (+ Free Tips)

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Virtua Assistant Business

#1. Virtual Assistant Business.


 A Virtual Assistant (VA) is a remote administrative agent, who works outside the office on the basis of the contract. The business revolves around provisions of clerical duties which include social media management, online marketing, web design, content management, blog management, graphic design, and many other digital services.

As of the 1990s, technology has paved its way into most homes and businesses. Because of limited office space and financial constraints, entrepreneurs discovered that they don’t have to bring workers to the office before they can deliver value to the organization. Hence, this gave room to the virtual assistant business. The goal is basically to minimize the cost of services because having a full-time employee can be very exorbitant financially.  It has been statistically proven that the demand for a virtual assistant will be in high demand because working from home is acceptable by both workers and employers.

#2. Virtual Assistant Business Names.

Most business owners feel some level of anxiety when it comes to naming their businesses. This is because; one needs a name that embodies the values and characteristics their brands represent. A business name creates an image of the kind of services the business provides in the sight of the potential customers and also facilitates internet search. When it comes to the success of a business, a good name makes a lot of difference. Before choosing a virtual business name, there are some factors one needs to properly consider.


Let’s buttress on some of those factors.

  • Don’t use ambiguous words
  • Check it on the Google platform
  • Get a name that has a meaning
  • Use easy-to-spell name
  • Easy to remember

Few List Of Virtual Assistance Business Names.

Task bullet, Digital workaholic, Active assistance, Creative cloud, Digital click, Task every day, 24/7 VA, Elite VA, Guru, Manpower group, rescue desk, round the clock VA, daily task, social assistant, support squad.

#3. How to Start A Virtual Assistant Business.


 These few steps will guild you, if you are ready to start your virtual assistant business.

a) Specify your niche:

There is no VA that can do everything at the starting point. Hence, the need to decide your area of specialty becomes very paramount. Since the concept of virtual assistant business encompasses lots of things, one can choose to major in social media as a consultant, graphic design, blog developer, online marketing, etc.  An attempt to start all at the same time will compromise the competence of the work you deliver. Hence, the saying “jack of all trade, master of none” upholds in this case. However, if you receive work outside the scope of your expertise, collaboration with another virtual assistant is advisable.

b) Decide a business name:

Stressing further on what we’ve discussed on this previously, it’s important that your business name encapsulate your brand and the services you render. In the Virtual Assistant business, n easy-to-pronounce name is highly advised. Have it checked on Google to know if it has been used, and avoid ambiguous names. It has to be easy to spell and a meaningful business name will do just fine.

c) Good business structure:

There is a popular saying that “he who fails to plan, has planned to fail”. In business, planning makes all the difference. A good business plan must include business goals, service charge, potential clients, marketing strategy, income, and expenditure. At this point you need to ask yourself, ‘will my business be a sole proprietorship or a partnership’.

d) Potential clients:


The fact that you have a service to provide doesn’t mean any and everyone will patronize you. It’s of the essence to find out the geographical area where your services are need and the social classes that will demand your services. This is where good adverts play a major role. One can maximize his/her social media platform for such purposes.

e) Get to work:

When all is said and done, the action is what makes the difference. A good plan without efficient work will still be dormant.  Virtual assistant business is not a get-rich-quick syndrome, it takes lots of hard work and persistence to build one’s business.

#4. How to Advertise Virtual Assistant Business.

a) Social media platform:

You need a professional social media account, through that you can tell all your friends and family members what you do. Of course, they too can visit your timeline to see what you deliver. Examples of social media platforms are Facebook, Instagram, Twitter, LinkedIn, etc.

b) Join a network:

Find people of like mind; that is into what you are doing and connect with them. You stand to gain both experience and work opportunities from them. There are many local and national virtual assistant business associations one can join, to aid advertise what one can offer.

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What Is INCOME BOND: Definition and Benefits

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INCOME-BOND

Maybe you’re an investor and seeks to know what an income bond is but, don’t know who to ask. Good thing you’re here. This article will give you all the details you need to know about income bonds including the basic tips, restructuring and it benefits the issuer.

What Is an Income Bond?

An income bond is a type of debt guarantee in which the investor promises to pay only the face value of the bond and coupon payments are paid only if the issuing company has sufficient profits to pay the coupon payment. In the context of corporate bankruptcy, an adjustment bond is a type of income bond.

Basic Tips

An income bond is a bond that promises only the repayment of capital and does not guarantee any interest rate or coupon. Instead, interest is paid to creditors as income flows to the issuer as specified in the banknote specification.


Lease bonds are often issued during a corporate debt restructuring, for example, after the deposit of Chapter 11 in bankruptcy.

Detailed Explanation

A traditional corporate bond is one that makes regular interest payments to bondholders and, upon maturity, repays the principal investment.


Bond investors expect to receive the reported coupon payments periodically and are exposed to default risk if the company faces solvency problems and is unable to meet its debt obligations.

Bond issuers that have a high level of default are generally given low creditworthiness by a bond rating agency to reflect that their securities issues have a high level of risk. Investors who buy these high-risk bonds also require a high level of return to compensate them for lending their funds to the issue

However, there are a number of cases where the guarantor does not guarantee a coupon payment. The face value in maturity is guaranteed to be paid, but interest payments will only be paid based on the issuer’s income over a period of time.

The issuer is responsible for paying coupon payments only when he has income in his financial statements, which makes such issues profitable for the issuing company that is trying to raise the capital needed to grow or develop its business. activity.


Interest payments on income securities, therefore, are not adjusted but vary depending on the particular level of income that the company considers to be sufficient. Failure to pay interest does not result in a loss as would be the case with traditional securities.

Debt Restructuring and Income Bonds

Revenue securities are a rare financial instrument that generally has a corporate purpose similar to that of preferred shares. However, it is different from the preferred shares in the late dividend payment and the preferred shareholders are found in the following periods until they are paid. Providers are not required to pay or receive any unpaid interest on income guarantee at any later time.

Revenue bonds can be arranged so that unpaid interest payments are increased and matured during the maturity of the bond issue, but this is not usually the case; therefore, it can be an important tool in helping an organization to avoid bankruptcy during a financial crisis or reorganization.

Lease bonds are often issued by companies with a problem in trying to get money quickly to go bankrupt or by bankrupt companies in restructuring programs that seek to maintain their operations while bankrupt. In order to attract investors, the agency would be willing to pay a higher bond rate than the average market rate.

In the case of a Chapter 11 bankruptcy resolution, a business may issue revenue bonds, known as restructuring bonds, as part of a company’s debt restructuring to help the business cope with its financial difficulties.

The terms of such collateral often include the clause that when a business generates good revenue, it must pay interest. If the income is negative, no interest payments are due.

Revenue bonds look similar to the shares you prefer. If no dividend is paid on preferential shares in a given year because of insufficient income, dividends are collected for that year and paid the following year if there is sufficient income.

This is not the case with income bonds, and therefore is different from each other. In the end, although it involves the creation of an instrument, it resembles an agreement between two parties and can be arranged according to the wishes of both parties.

How Does Income Bond benefit the Issuer?

This type of bond works very well in times of financial crisis or financial health of a company, as long as investors believe in signing up. The direct benefit of this guarantee is that it can prevent the company from going bankrupt.

NSI Income Bond

NSandI is a UK-based savings organization dedicated to raising low-cost government funding from the public. Revenue bonds are one of the many NSI savings products offered to the public.

Who can open an Income Bonds account

NSI Income Bonds are available to an individual aged 16 and over. You can create a Revenue Assurance account for yourself or someone else as a joint venture Account.

You can also open one as a deposit for sponsors (also as a company) Sponsors), whether alone or in partnership with other sponsors. Beneficiaries of Investments must be made to individuals.

Any company that had an Revenue Guarantee Account up to and including January 1, 1990
keep holding and investing in an account.

You can open as many Revenue Assurance accounts as you wish, but there is a hold limit
(See “How much can you keep?”).

How to open an Income Bonds account

When you open an account, you can request:
• Online or by phone with your UK payment card
• By post using a personal cheque drawn on your UK bank or building society
account, or a banker’s draft or building society branch cheque.

If you are an attorney or an agent asking for an account on behalf of someone else, you are
You must apply by post if your authority is not yet registered with us. (Please note
General terms and conditions – “Application as an attorney or representative or trustee”.)

Related: Funding Opportunity – GrayMatter Capital

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What Is BUSINESS CYCLE?- Definition, Internal and External Causes

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BUSINESS-CYCLE

What is Business Cycle?


A business cycle is a cycle of fluctuations in the gross domestic product (GDP) around its long-term natural growth rate.

From a conceptual point of view, the business cycle is the upward and downward movement of GDP (Gross Domestic Product) and refers to the time of expansions and contractions in the level of economic activity (trade fluctuations) around a growth trend of long term.

Business Cycle Stages

Business-Cycle
Business Cycle Diagram

In the diagram above, the straight line in the middle is the constant growth line. The business cycle moves around the line. Below is a more detailed description of each phase of the business cycle:

Expansion


The first phase of the business cycle is expansion. During this phase, positive economic indicators such as employment, income, production, wages, profits, demand and supply of goods and services increase. Debtors tend to pay their debts on time, the speed of the money supply is high, and investments are high. This process will continue as long as economic conditions are favorable for expansion.

Peak

The economy then reaches a saturation point or climax, which is the second stage of the business cycle. Maximum growth limit is reached. Economic indicators have stopped growing and are at their highest level. Prices are at their peak. This phase marks the turning point in the trend of economic growth. Consumers tend to restructure their budgets at this point.

Recession


The recession is the stage that follows the peak phase. The demand for goods and services begins to decline rapidly and steadily in this phase. Producers do not notice the drop in demand immediately and continue to produce, leading to an oversupply in the market. Prices tend to go down. As a result, all positive economic indicators, such as income, production, wages, etc., start to fall.

Depression

Unemployment increases accordingly. Economic growth continues to decline, and since it is below the constant growth line, the stage is called a depression.

Trough

In the depression phase, the economic growth rate turns negative. There is a further decline until factor prices, as well as the demand and supply of goods and services, reach their lowest point. The economy finally bottomed out. It is the negative saturation point of an economy. National income and expenditures are largely depleted.

Recovery

After this phase, the economy is in a recovery phase. At this stage there is a trend reversal and the economy begins to recover from the negative growth rate. Demand starts to rise due to lower prices and, consequently, so does supply. The economy develops a positive attitude towards investment and employment, and increases production.


Employment is starting to rise and due to accumulated cash balances with bankers, loans are also showing positive signs. In this phase, depreciated capital is replaced by producers, which leads to new investments in the production process.

The recovery will continue until the economy returns to sustained growth levels. Complete a full boom and bust business cycle. The extreme points are the high point and the low point.

Who measures the business cycle?

The National Bureau of Economic Research uses quarterly GDP growth rates to determine the phases of the business cycle and also uses monthly economic indicators such as employment, real personal income, industrial production, and retail sales. It takes time to analyze this data, so the NBER will not inform you of the phase until it has started.8 You can check the indicators yourself to see where we are in the business cycle.

Who manages the economic cycle?

The government manages the business cycle. Lawmakers use fiscal policy to influence the economy. They use expansionary fiscal policies if they want to end a recession, and they should use contractionary fiscal policies to prevent the economy from overheating. However, this rarely happens because they are thrown out of office when taxes are raised or popular shows cut.

The central bank of the nation uses monetary policy. It cuts interest rates to end a contraction or bottom out called expansionary monetary policy. The central bank raises interest rates to manage an expansion so that it does not peak. That is a contractionary monetary policy

Causes of business cycles

The cyclical pattern of changes in the economy is caused by many factors combined. There are internal factors within the economy that can cause these changes. And there are also external factors that can lead to an economy boom or bust. Let’s take a look at all the causes of business cycles.

Internal causes of business cycles

These endogenous factors can cause changes in the stages of the business and the economy in general. Let’s take a look at the internal causes of business cycles.

1] Changes in demand

Keynes economists believe that a change in demand causes a change in economic activity. When demand increases in an economy, companies produce more goods to meet the demand.

There is more production, more employment, more income and higher profits. This will lead to an economic boom. However, excessive demand can also lead to inflation.

On the other hand, when demand falls, so does economic activity. This can lead to bankruptcy which, if held for an extended period of time, can even lead to a downturn in the economy.

2] investment fluctuations

Fluctuations in investment, such as fluctuations in demand, are one of the main causes of business cycles. Investments will fluctuate based on many factors, such as the economy’s interest rate, business interests, profit expectations, etc.

An increase in investment will lead to an increase in economic activity and will lead to expansion. A decrease in investment has the opposite effect and can cause a bottom or even a depression. Apply Business ethics.

3] Macroeconomic policy

The monetary and economic policies of a nation will also lead to changes in the phases of an economic cycle. So when monetary policy tries to expand economic activity by encouraging investment, the economy will skyrocket. On the other hand, if taxes or interest rates go up, there will be a slowdown or recession in the economy.

4] Money supply

There is another belief that business cycles are purely monetary phenomena. So changes in the money supply will cause business cycles. An increase in money on the market will lead to growth and expansion.

However, too much money can also cause adverse inflation. And the decrease in the money supply will cause a recession in the economy. Learn financial management!

External causes of business cycles

1] Wars

In times of war and unrest, economic resources are used to make special goods such as weapons, weapons, and other similar war goods. The focus is shifting from consumer goods and capital goods. This will lead to a decrease in income, employment and economic activity. Then the economy will experience a wartime recession.

And later, after the war, the focus will be on rebuilding. It is necessary to rebuild the infrastructure (houses, roads, bridges, etc.). This will help the economy recover if progress is made. Economic activity will increase as effective demand increases.

2] technological shocks

New and exciting technology is always a boom for business. New technologies mean new investments, more jobs and, as a result, higher income and profits. For example, the invention of the modern cell phone was the reason for a huge boom in the telecommunications industry.

3] Natural factors

Natural disasters such as floods, droughts, hurricanes, etc. they can damage crops and seriously damage the agricultural sector. Food shortages will lead to higher prices and high inflation. Capital goods can also experience a decline in demand.

4] population growth

If population growth gets out of control, it could be a problem for the economy. Basically, the total savings of an economy decrease when population growth is greater than economic growth. Then investment will also fall and the economy will experience depression or slowdown.

To get a full understanding of the business cycle, you have to know what business is, the concepts and characteristics

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