What Is a Small Business?
Small is a term that often refers to businesses that are small in size. These businesses are a vital part of the economy, and they can be anything from a mom-and-pop bakery to an auto repair shop or a Hampton Hotel franchise.
The Definition of a Small Business
A small business is one that meets specific numerical standards set by the Small Business Administration (SBA). These size standards depend on industry, and vary depending on the subsector in which your business is headquartered.
The SBA sets these small business size standards in order to protect and promote smaller businesses within the larger economy. These size standards ensure that smaller companies are not discriminated against when applying for government contracts or business funding.
Besides this protection, a small business also has an advantage when it comes to accessing tax incentives and government contracts. These benefits can include loans, grants and other assistance from the federal government, as well as help with business plans and financing.
When deciding on which small business to start, take into account your personal interests, skills and needs. This will give you a better idea of how much money you need to make, as well as what kind of market position and competitive advantages your business can have in the industry.
How to Calculate Your Business’s Size
When you first decide on your small business, calculate your company’s average annual receipts. This can help you determine if you’re eligible for federal small business tax benefits, such as those offered through the Small Business Administration (SBA).
If your average annual receipts are below the SBA’s small business size standards, you may be able to qualify for the small business tax credits. These benefits can be used for things like buying a new computer, office furniture or even hiring an employee to boost your productivity.
The SBA is not the only organization that sets size standards, but it is a good place to begin. This agency helps to promote and support the small business industry by providing resources and ensuring that small companies are not discriminated against when applying for public contracts or government funding.
Small Businesses Are Everywhere
The number of small businesses in the United States is huge. In fact, small businesses represent 89.6% of all businesses in the country, and 23 million of these are considered to have no employees at all.
These businesses are largely independent, and they often come from individuals who have a passion for their own business and want to grow it. This is a great way for entrepreneurs to take control of their own lives and create a positive impact on the world around them.
This type of entrepreneurship requires risk taking and financial responsibility, as well as a willingness to invest in marketing initiatives and customer outreach. It can be challenging to determine your exact business model when you’re just getting started, but with a little research and some smart planning, you can get started on the road to success.
