What is a Small Business?
The Small Business Association defines a small business as one that is independently owned and operated, is organized for profit, and is not dominant in its field. Depending on the industry, size standard eligibility is based on the average number of employees for the preceding twelve months or on sales volume averaged over a three-year period. Here are the standards for the following industries;
- Manufacturing: Maximum number of employees may range from 500 to 1500, depending on type of product manufactured;
- Wholesaling: Maximum number of employees may range from 100 to 500 depending on particular product being provided;
- Services: Annual receipts may not exceed $2.5 to $21.5 million, depending on particular service being provided;
- Retailing: Annual receipts may not exceed $5.0 to $21.0 million, depending on particular product being provided;
- General and Heavy Construction: General construction annual receipts may not exceed $13.5 to $17 million, depending on type of construction;
- Special Trade Construction: Annual receipts may not exceed $7 million; and
- Agriculture: Annual receipts may not exceed $0.5 to $9.0 million, depending on agricultural product.
- A big business can be started at a very high cost and on a full-time basis. Small business is also well suited to internet marketing because it can easily serve specialized niches. Adapting to change is crucial in business and particularly small business; it is typically easier to respond to the marketplace quickly. Small business proprietors tend to be intimate with their customers and clients which results in greater accountability and maturity.
- Independence is another advantage of owning a small business. Small business owners showed that who left their jobs at other companies said their main reason for leaving was that they wanted to be their own bosses. Freedom to operate independently is a reward for small business owners. In addition, many people desire to make their own decisions, take their own risks, and reap the rewards of their efforts. Small business owners have the satisfaction of making their own decisions within the constraints imposed by economic and other environmental factors.However, entrepreneurs have to work for very long hours and understand that ultimately their customers are their bosses.
- Several organizations, in the United States, also provide help for the small business sector, such as the Internal Revenue Service’s Small Business and Self-Employed Resource.
- Small businesses ( often carried out by family members) adjust quicker to changing conditions, however they are closed to the absorption of new knowledge and employing new labor from outside.
Some of the revenue allowed for small business concerns, makes one think, they are not very small after all.. But these are the criteria the federal government uses