Small Business Framework - Research - The Legal Services Board

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Defining"Small"Businesses"" !
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The"most"recent"estimate"of"the"total"number"of"private"sector"businesses"in"the"
United"Kingdom"is"4.5"million,"of"which"3.9"million"are"in"England"(Department"
for" Business," Innovation" and" Skills" 2011)." However," these" figures" hide" an"
enormous" diversity" of" business" activity," form" and" size." Focusing" on" size," while"
42%" of" employment" is" within" enterprises" employing" 250" or" more" employees,"
74%"of"all"enterprises"have"no"employees"(Department"for"Business,"Innovation"
and"Skills"2011).""
Within" the" context" of" this" report," a" particular" concern" is" to" provide" a"
methodology" to" ascertain" how" those" businesses" that" are" least" able" to" draw" on"
significant"internal"resources,"capacity"or"experience"respond"to"the"justiciable"
issues"they"face."Accordingly,"the"report"is"centred"on"smaller"businesses,"which"
generally" have" less" scope" to" purchase" specialist" services," a" narrower" range" of"
internally" available" competencies" and" skills," and" fewer" prior" encounters" with"
justiciable" issues" upon" which" to" construct" protocols" than" their" larger"
counterparts"(Asia"Consulting"Group"and"Policy"21"2008).""
In"setting"out"a"methodology"to"reveal"smaller"businesses’"experiences"of"
justiciable"issues,"and"to"benchmark"their"need"for"and"use"of"legal"services,"it"is"
necessary"to"first"define"precisely"which"businesses"the"methodology"is"directed"
towards." As" is" made" evident" elsewhere" in" this" report," different" considerations"
apply"to"studies"of"differently"sized"businesses."
In" this" section," we" therefore" outline" the" different" definitions" that" have"
been"used"to"identify"and"classify"small"and"medium]sized"enterprises"(SMEs)."
We" set" out" the" evolution" of" definitions" within" the" UK" and" EU" context," and"
There"is"no"single"
definition"of"a"small"
business"or"SME"!
highlight" those" that" are" now" used" in" the"
collation" of" statistics" by" key" government"
agencies,"and"are"most"widely"recognised"by"
stakeholders." We" then" recommend" a"
definition"to"frame"the"Legal"Services"Board’s"
benchmarking" of" business" customers’" need" for" and" use" of" legal" services." This"
definition" guides" the" methodological" approach" set" out" in" the" remainder" of" the"
report." Crucially," the" definition" is" both" operational" and" meaningful" to"
stakeholders."
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Defining!Small!Businesses!
There" is" no" single" or" legal" definition" of" small" businesses" or" SMEs," with"
definitions" varying" between" different" organisations" that" collect" data" on"
businesses,"whether"they"are"private"sector"organisations,"government"agencies,"
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