MSME stands for Micro, Small, and Medium Enterprises.
MSME Meaning
An MSME is a locally operated enterprise that runs for-profit and targets local customers for selling with profit generation.
MSME Definition
In terms of Government of India Gazette Notification S.O. 2119 (E) dated June 26, 2020, the definition of micro, small and medium enterprises is as under:
Manufacturing Enterprises and Enterprises rendering Services
(i) A micro enterprise is an enterprise where the investment in plant and machinery or equipment does not exceed ₹1 crore and turnover does not exceed ₹5 crores;
(ii) A small enterprise is an enterprise where the investment in plant and machinery or equipment does not exceed ₹10 crore and turnover does not exceed ₹50 crores; and
(iii) A medium enterprise is an enterprise where the investment in plant and machinery or equipment does not exceed ₹50 crores and turnover does not exceed ₹250 crores.
MSME Regulator
MINISTRY OF MICRO, SMALL & MEDIUM ENTERPRISES, GOI
MSME V/s Startup (Difference between MSME and Startup)
An entity shall be considered as a Startup:
1. If it is incorporated as a private limited company or registered as a partnership firm or a limited liability partnership in India
2. Up to 10 years from the date of its incorporation/registration
3. If its turnover for any of the financial years since incorporation/registration has not exceeded INR 100 Crores
4. If it is working towards innovation, development, or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation
Where An MSME is a locally operated enterprise that is following the same business model which is tested and tried by others and not unique. MSME adopts common business models where Startups create new business models and test while running the business. MSME founders are focused on making a profit where Startup founders are more focusing on expanding the business with funding from Investors.
Most of the MSMEs go for debt but Startups raise funds from investors based on equity.
Most MSMEs are not high-risk-takers like I wrote they follow the same business model which is tested and tried by others and not unique on the other hand Startups create new business models and test while running the business which includes high risk.
That is all, I hope this helped you to understand the concept of MSME. Please bookmark (ctrl+D) this website so you will get information with less effort check the other articles too.
