SME Definition & Overview

A small-to-medium-sized enterprise (SME) has several definitions depending on the source. But above that, it is first and foremost an entity that must be legally registered and compliant with relevant Australian regulatory bodies.

According to the Australian Bureau of Statistics (ABS), an SME refers to any business with more than five employees and fewer than 200 employees. The reference point is the number of employees over anything else.

However, according to the Australia Taxation Office (ATO), the reference point of an SME is the revenue turnover of the business.

A small business in the ATO’s eyes refers to any business with an annual turnover of $10 million or less. Meanwhile, a medium business has a turnover between $10 million and $250 million.

In contrast, according to these sources, a large business or a corporation refers to businesses with over 200 employees and/or an annual turnover above $250 million.

ABS Definition & Classification of SMEs

The Australian Bureau of Statistics (ABS) classifies Australian SMEs as businesses with 19 or fewer people, but its definition also reaches beyond that.

An SME also bases its classification system on the Australian and New Zealand Standard Industrial Classification (ANZSIC) system, which groups businesses according to their main economic activity.

These classifications include:

• Retail Trade
• Construction
• Professional Services
• Manufacturing
• Healthcare
• Hospitality

For instance, the local independent cafe down the block is an example of an SME in the hospitality space. The local removalist company, on the other hand, falls under the construction space.

These classifications are essential for businesses to know the right regulatory requirements of their particular business structure. Groups classified in different categories will have to make different reports, tax filings, and regulatory laws surrounding them. They will also have access to different grants.

As such, it is essential to be familiar with where your business stands to ensure that it is abiding by local regulatory requirements.

Key Characteristics

A more in-depth look into the key characteristics that categorise different business structures is provided below.

• Micro-enterprises: These have 1-4 employees. Examples include freelancers, sole traders, family businesses, or small partnerships. Modest revenue turnover of <$2 million annually.
• Small businesses: They have a small team of <20 members with an intuitive management structure. Examples include a boutique marketing agency, a local cafe chain, and a large plumbing company. Decent revenue turnover between $2 million to $10 million.

Medium-sized businesses: These have a decent-sized workforce of 20-199 employees. Clear management hierarchy with specialised roles. Examples include a national technological company, a mining company, and a regional food manufacturer. Revenue turnover between $10 million to $250 million annually.

Example of SME Industries in Australia

Some business types thrive under an SME structure. This is usually due to their low barriers to entry, high demand, and good levels of government support.

Here are some examples of SME industries in Australia.

Trade Services

Plumbing, electrical, carpentry, and moving companies are classic SME industries. With tools, training, and licensing, many tradies run profitable small businesses that serve residential and commercial clients.

IT & Web Development

Web agencies, cybersecurity, and tech consulting firms are prime examples of businesses that typically operate under an SME setup. The low overhead costs, specialised skillset, and high demand of these businesses make them thrive as small- to medium-sized enterprises.

NDIS & Healthcare

Support coordinators, allied health providers, and disability care services under the NDIS framework often operate as SMEs, supported by government funding and a growing client base.

Cleaning & Maintenance

Maintenance specialists and cleaning businesses are also common SMEs. This is because these businesses are easy to start and scale once you have the tools, making them popular micro and small enterprises.

Recreation & Fitness Services

Gyms, yoga studios, and personal training services often operate under the SME category. This is because they offer community-based services.

Why SMEs Need A Toll-Free 1300/1800 Number

Now that we understand SMEs, let’s talk about a simple tool that can take them to the next level—business phone numbers, specifically 1300 numbers and 1800 numbers.

Here are some reasons why this asset is useful for SMEs.

Customer Perception

A 1300 or 1800 number makes your business look more trustworthy, established, and professional. Such numbers are often associated with bigger corporations and established businesses.

This makes customers more likely to pick up the phone to call your company, even if you are just starting out.

Building A National Presence

Toll-free numbers allow your company to take on a national presence. It does this because it allows callers across Australia to call you on local rates, removing the geographical limitations typical of personal phone numbers.

This can expand your reach and allow your company to service clients beyond the local community.

Improve Call Handling

Inbound numbers come with a wide array of features, such as call forwarding, call analytics, and IVR routing. This allows your team to manage incoming calls more efficiently and keep customer service expectations at a high level.

Find A Cost-Effective Solution For Customer Service

Despite the wide range of features, 1300 and 1800 numbers are actually more cost-effective for your business than personal phone numbers. This is because you do not need to buy a new set of hardware each time you want to expand your reach.

That said, it is essential to watch out for hidden fees to ensure you are not spending more than necessary. Learn how to avoid hidden fees when getting a 1300/1800 number here.

FAQs

What is an SME in Australia?

An SME (small-to-medium enterprise) in Australia is a business with fewer than 200 employees and an annual turnover of less than $250 million. This classification ranges from sole traders to growing mid-sized companies.

What are the benefits of being classified as an SME?

There are many benefits. Being classified as an SME gives businesses access to government support, funding programs, and tax concessions.

Do SMEs get government funding in Australia?

Yes.

Many SMEs are eligible for grants, subsidies, and loans through federal and state government programs. These grants can rotate in and out depending on availability, but you can find available ones through a government-run grant finder.

How does a 1300/1800 number benefit an SME?

A 1300 or 1800 number boosts credibility, national reach, and customer trust. They also come with call management systems like call routing and IVR tools to streamline communication between customers and agents.

Is a 1300 number better than using a mobile for business?

Without a doubt!

A 1300 number offers scalability, increased calling capacity, and built-in analytics—all while remaining more affordable than buying multiple mobile numbers and devices.

How do I get a 1300 number for my SME?

Simple! Find a reputable 1300 number provider, choose your number type and pricing plan, and submit an application through their online portal.

Once approved, you will be given the number and a set of instructions to activate your new number.

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