Nine Employees Is Too Many?

In ordinary conversations, when you ask an individual to define a business, typically they paint out a picture that features the well-dressed couple from the local corner shop, or even the young freelance web designer with his or her latest projects. However, for many individuals the definition of a business is more complicated than that. Often business encompasses much more than meets the eye and requires additional layers of understanding before you can truly know what type of business you are conducting. If you are considering starting your own business, it helps to know some of the key definitions to help you understand the nature of the business you are thinking about starting.

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Nine Employees Is Too Many?

In ordinary conversations, when you ask an individual to define a business, typically they paint out a picture that features the well-dressed couple from the local corner shop, or even the young freelance web designer with his or her latest projects. However, for many individuals the definition of a business is more complicated than that. Often business encompasses much more than meets the eye and requires additional layers of understanding before you can truly know what type of business you are conducting. If you are considering starting your own business, it helps to know some of the key definitions to help you understand the nature of the business you are thinking about starting.

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Before looking at the definition of a business, it helps to take a step back and consider what you hope to accomplish through your new project. Many small business owners fail to fully define their new venture until it is too late to do anything about it. Often this is due to lack of clarity regarding their goals. If you are on the verge of starting your new business venture, consider the following questions to help you better understand what you want to achieve with the business you have chosen.

Does your company focus on providing a product or service? Resource poverty is a significant issue in small businesses, but not nearly as prevalent as it is in large businesses. Resource poverty simply means the difference between how much money you make compared to how much you need to pay your employees. It is very important to remember that all business owners need to be paid, but small businesses tend to fall into the resource poverty category because of excessive overhead costs, employee bonuses/wages, and a dependence on outside contractors.

Do you anticipate expenses during your first year of business? For many small businesses, the first year is typically the flush-era, when income is flowing through the business and expenses are flat. Expenses can start piling up in the second year if income has tapered off. Most business owners make the mistake of thinking they know what expenses will be and do not prepare for an unforeseeable expense surprise.

Do you want to cut cost with outsourcing? All small business owners should be concerned with their bottom line. Some owners use outsourcing only when their time and talent cannot meet deadlines. These owners may believe that outsourcing eliminates the need to provide quality customer service. Although outsourcing is a great tool for cutting expenses, small businesses may not see a need to outsource software tools. Outsourcing is not necessarily a bad idea; however, most small businesses should not attempt to cut corners on software tools unless absolutely necessary.

Is your business considered small if your annual revenue is less than two-hundred dollars? If so, then you probably do not have a clear understanding of how to properly manage your business. The most important aspect of any business is its ability to grow its annual revenue. In order to increase revenue, small businesses must seek additional sources of funding. If you are experiencing difficulty in raising capital, it may be time to consider seeking the services of a business consultant.

Is it possible for small businesses to survive without a computer and internet access? The internet is essential to most small businesses today. In fact, it may be more important to have access to the internet than human resources, payroll, accounting, or warehouse space. A business without a web server and internet access is considered small in today’s market.

When should a business consider outsourcing? Unless your business is at the cutting edge of technology, it is often not a good idea to outsource. Most small businesses experience growth during periods when their customers and competition are increasing at an alarming rate. When a business must expand rapidly, outsourcing is often at the root of the problem.

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