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Study on small enterprises born in 2004

Thursday 26 May 2011, by Rose Blackburry

Definition of Small Enterprises (as defined by the European Community) an Small and Medium Enterprises

The Small Enterprises (SEs) have the following characteristics:

  • Less than 50 employees
  • Turnover or equity less than 10M€

The Small and Medium Enterprises (SMEs) have the following characteristics:

  • Less than 250 employees
  • Turnover less than 50M€ or equity less than 43M€

Main results

The data used in this study include all French firms defined as SEs by the European Community created in 2004. This study shows their evolution in term of employees from 2004 to 2005.

Around 70 000 enterprises are considered in this study:

Total employment 2005
TOTAL (2004)
Still SE (2005)
No Balance Sheet (2005)
Changed into SME (2005)
Stopped (2005)
Num. of employees
69 806
59 548
8 371
363
0,5%
1 524
0
19 008
15 988
2 450
88
0,5%
482
1-2
29 020
24 687
3 635
43
0,1%
655
3-5
13 982
12 178
1 509
37
0,3%
258
6-9
4 666
4 124
435
37
0,8%
70
10-19
2 211
1 870
258
45
2,0%
38
20+
919
701
84
113
12,3%
21

Thus, for the SEs established in 2004, only 0.5% of these companies are outside of the scope in 2005 (no longer considered as SEs), that is to say they have either more than 50 employees in 2005, a turnover and / or total assets exceeding 10 million Euros in 2005, or both.

Companies leaving in the scope of SEs, which can be considered as the most dynamic, have an average capital that is significantly higher than the other companies as shown in following table:

Average capital (in K€) 2004
TOTAL (2004)
Still SE (2005)
No Balance Sheet (2005)
Changed into SME (2005)
Stopped (2005)
Num. of employees
54,4
28,8
25
4 994
173,40
37
0
67,2
16,6
23
10 775
649,10
15
1-2
31,8
21,8
14
7 528
345,32
16
3-5
48,6
32,0
34
6 357
198,66
15
6-9
84,7
53,8
62
3 172
58,96
412
10-19
111,5
88,0
78
1 345
15,28
35
20+
295,7
190,3
69
1 132
5,95
222

Thus, on average, the level of capital used at the creation of businesses leaving the scope of SEs in 2005 is 173 times (!!) higher than the companies that are still SEs in 2005. Indeed, the seed-capital level is significantly higher for companies leaving the scope of SEs with an average capital of around 5 000K€ at their creation compared to an average capital of around € 29K for firms remaining SE in 2005.

Businesses out of the SE scope in 2005 are also more dynamic in job creation:

Average capital (in K€) 2004
TOTAL (2004)
Still SE (2005)
No Balance Sheet (2005)
Changed into SME (2005)
Num. of employees
208 142
182 239
12 949
10 566
5,1%

0
9 795
8 859
455
408
4,2%
1-2
55 487
49 751
4 496
364
0,7%
3-5
54 227
49 642
3 238
709
1,3%
6-9
33 070
30 383
1 557
880
2,7%
10-19
27 696
23 849
1 827
1 694
6,1%
20+
27 867
19 755
1 376
6 511
23,4%

Thus, companies outside of the SE scope, which represent only 0,5% of the SE created in 2004, represent more than 5% of total employment in 2005. Moreover, as shown in the table below, these companies also have a very high employment growth rate. Indeed, the number of employees of companies leaving the SE scope in 2005 doubled from 2004 to 2005, while the number of employees of companies remaining SE grew by 16.6%.

Total employment growth 2004-2005
TOTAL (2004)
Still SE (2005)
No Balance Sheet (2005)
Changed into SME (2005)
Num. of employees
13,1%
16,6%
-32,4%
106,2%
0
n.a.
n.a.
n.a.
n.a.
1-2
31,6%
37,9%
-12,3%
391,9%
3-5
5,7%
10,8%
-40,2%
392,4%
6-9
-1,3%
2,3%
-48,9%
216,5%
10-19
-4,6%
-3,4%
-43,8%
161,4%
20+
-0,3%
-6,1%
-41,0%
63,6%