What is a Small to Medium Sized Business: SMB Definition

enSMBs (an acronym for small to medium-sized businesses) generally have fewer than 100 employees and less than $1 billion in annual revenue. It can refer to various businesses, including B2B and B2C organizations.

If you’re selling to small and midsize businesses, you need to understand how they think, what they need, and which pieces of this large sector of businesses you must focus on.

So, what are SMBs, and how does understanding the needs of small and medium-sized businesses help your sales team succeed?

Small to Mid-Sized Business Definition

An SMB (small to medium-sized business) is generally defined as companies with fewer than 1000 employees and less than $1 billion in annual revenue.

When you think about the definition of a "small business," most folks think of the local diner or the mom-and-pop grocery store down the street. In fact, the world of SMBs is a unique, wonderful place filled with hardworking, tech-savvy folks who are dedicated to providing jobs and building a better world.

NOTE: SMB can also refer to server message block protocol. That's not what we're talking about here.

Being a small business also comes with its challenges. While large enterprises may worry more about overall market share and profits, small businesses worry more about ensuring they stay under budget with their purchases, save time, and avoid risks that might damage their business.

SMB definition vs enterprise companies

Examples of SMBs

An SMB company can be in any industry, and most of the businesses we interact with daily are SMBs—in fact, small businesses account for 99 percent of all firms in the US.

In B2C, a small to medium-sized business might include a local shop or restaurant, an Etsy shop, or a service-based business, like a power washing company or yard care business. Larger businesses (aka enterprise companies) include Amazon, Apple, and Starbucks.

In B2B, examples of small to medium businesses include startups like Close and larger companies like Salesforce or SAP. B2B examples of SMB businesses also include freelancers and small sales or marketing agencies that provide support and services to other companies.

What is the Difference Between SMB and Enterprise Companies?

When defining an SMB, it's helpful to look at how they compare to large businesses – the Apples and Starbucks of the world. Here are the main differences between SMBs and enterprise companies:

Number of Employees

Gartner defines small businesses as companies with fewer than 100 employees and midsize businesses as companies with fewer than 1000 employees. Larger enterprises tend to have 1000+ employees.

Annual Revenue

An SMB's annual revenue is less than $1 billion, while enterprises could earn much more.

Buying Process

The buying process for SMBs is often shorter and more straightforward. Fewer people are involved in every deal, and there is less red tape to cut through to get approvals. That said, small businesses are cautious about spending money, so they need to know that what they’re purchasing is worthwhile and can provide value to their business as a whole.

A sales cycle of up to 18 months is considered normal for enterprise companies. This is because enterprise deals are complex, and involve a lot of decision-makers and stakeholders.

Pain Points

In very broad terms, all customer pain points fit into one of these four main categories:

SMB pain points chart finances productivity processes support

Pain points in SMBs can differ from enterprise sales. For example, productivity may be a larger piece of the puzzle for SMBs—since they have fewer employees, they need to find more creative ways to save time.

Also, support needs look very different for SMBs. Smaller businesses may rely on your sales team and their expertise to help guide them through aspects of their business that are less familiar, such as setting up technology or navigating hosting solutions.

SMB Growth Opportunities

Small businesses make the world go round. And there's something to be said for being small but mighty. As a small business ourselves, we've got a pretty good idea of how other SMBs can leverage their small teams to do big things. Here are a few ways SMBs can lean into growth.

Leverage the Right Technology

Small business owners often fall into the trap of trying to do it all. Instead of running yourself ragged, look for tools to make your life easier. A CRM is the obvious first step we'd recommend, but there are tons of other tools that can help make your SMB more effective:

  • Meeting scheduling software: Tools like Calendly can automate your meeting scheduling and allow leads to schedule a demo, quote, or just get to know you better.
  • Website builder: You no longer have to invest 20K to get a small business website. Using tools like WordPress or Ghost, you can easily build a website in a few hours.
  • Email tools: Email marketing tools like Mail Chimp or Constant Contact make building and growing your email marketing list easy. Most of these tools also integrate with marketing platforms and your CRM.
  • Prospecting tools: The right prospecting tools make finding leads and building your customer base easier. These tools help enrich leads, dial calls, and schedule calls.

Be Nimble

If you've ever worked at a large company, you know how difficult it can be to change even the smallest policy. Want to implement a casual Friday dress code? You must talk to your boss, their boss, and HR and get a sign-off from 5 different execs.

That's where SMBs shine. Rather than spending days on red tape and bureaucracy, you can quickly spot an opportunity and make changes. Spot a new marketing channel? Give it a spin. See a new market opening? Get your foot in the door.

Remember when the COVID pandemic hit, and big businesses were scrambling? Small business owners didn't need to go to shareholders to get permission to work from home. While it might be hard to view your small size as an opportunity when enterprise counterparts drop six digits on ads, being nimble allows you to respond to opportunities and crises faster.

Provide Better Customer Service

SMBs are often in a good position to offer better customer service. You understand your customers better, you know who your customers are, and (if you use the right tools ⬆️) you can provide faster response times than big businesses with thousands of employees and customers.

Ready to Grow Your Small to Mid-Sized Business?

Close is an SMB company, which means we understand the needs of small businesses. We know how small businesses work and what they need to succeed.

Of course, one important resource you’ll need is a CRM that helps you optimize communication with your prospects and customers. Try Close CRM today to see how we can help you close more SMB deals.

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