What Are Small and Midsize Enterprises (SMEs)?

By Matthew DiLallo – Updated Dec 7, 2025 at 11:58 PM EST

Key Points

SMEs are vital, making up 99.9% of U.S. businesses and nearly half the workforce.
Investing in SMEs indirectly via firms like BILL, which aids their financial tasks, is feasible.
SMEs adapt quickly and grow fast, offering higher potential returns to investors.

Small and midsize enterprises (SMEs) are companies whose size (e.g., number of employees, revenue, etc.) falls below a specified limit. That threshold varies by country since each defines SMEs differently.

Here's a closer look at SMEs and their vital role in the world.

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Three people in a small mom-and-pop retail shop. — Image Source: The Motley Fool

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Revenue

Revenue is a business’s gross income or the amount of money it brings in from regular operations before costs are considered.

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About the Author

Matt DiLallo has been a contributing Motley Fool stock market analyst specializing in covering dividend-paying companies, particularly in the energy and REIT sectors, since 2012. He also covers pre-IPO companies, ETFs, and other investing topics. He holds an MBA from Liberty University.

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Matt DiLallo has positions in Bill Holdings and Paycom Software. The Motley Fool has positions in and recommends Bill Holdings and Paycom Software. The Motley Fool has a disclosure policy.