SMEs (Small and Medium-sized Enterprises)

In the European Union, SMEs (Small and Medium-sized Enterprises) are defined as businesses with fewer than 250 employees and either an annual turnover of up to €50 million or a balance sheet total of up to €43 million. This umbrella category is further divided into:

• ‍Micro-enterprises, with fewer than 10 employees and turnover or balance sheet up to €2 million;
• ‍Small enterprises, with fewer than 50 employees and turnover or balance sheet up to €10 million;
• ‍Medium-sized enterprises, with fewer than 250 employees and turnover or balance sheet up to the upper limits above.

EU public procurement policy actively promotes SME participation to ensure fair competition and broader access. Authorities are encouraged to structure tenders—such as splitting into smaller lots—and simplify procedures to make opportunities more accessible to SMEs. Studies show that dividing contracts into lots can increase SME winning likelihood by approximately 4 %. Such measures are outlined in EU guidelines and best-practice frameworks as part of the “think small first” approach.

For tender designers, considering SME inclusion means introducing features like contract subdivision and streamlined documentation to encourage SME participation. For SMEs, this framework ensures that many public procurement opportunities are within reach, even if they lack the capacity to compete for large, complex contracts. By actively fostering SME access, procurement practices become more diverse, resilient, and aligned with broader economic policy objectives.