Small Business Innovation – The Definition of a Business, What is a Home Based Business and Its Obligation to Employees

When we start a business, the goal is to make it successful. That is the ultimate goal, isn’t it? That is the vision that we are all working towards. Unfortunately, there are times when we lose sight of the goals and what our business is for in the grand scheme of things. Well, nearly every survey you have ever read about small companies, and almost every poll you have ever heard from, is talking about companies defined by insane parameters such as this:

“If we can get 10 employees, then we can spend five million dollars a year on advertising”. Now, that is a silly definition, if you ask me. I asked a small business attorney the same question, and here is what he told me: “unless you sell something, you do not need to advertise.” See, the definition of advertising to me, should be “the use of words to bring awareness to people about your products or services”. If you spend money advertising, you need to have an employee to measure how effective the advertising was, otherwise you have not spent money at all.

So let’s take this crazy definition of advertising to another level, shall we? Let’s define a small business as any business that meets these criteria: (a) the business produces a product or service that is unique, (b) the business has no employees, (c) the business exists solely for the benefit of its customers. Sounds good, right? Well, consider if you will all the small businesses that do not meet these requirements.

Consider a landscaper in Atlanta, Georgia. His business consists of putting together gardens, mowing the lawn, putting on the Christmas tree lights, doing the Easter decorations, washing the cars, etc. Does he have a building and a garage? Yes, but he does not provide any employees, nor does he sell anything or provide any service to anyone outside of his own family and/or immediate family. Does he offer any product or service that could remotely be considered ‘services”?

Not really, no, because he has no employees, no retail shop, no office, nor does he provide any service to anyone outside of his immediate family. Now then, consider the small business with the $20 million annual receipts that passes through four doors: Home Depot, Lowe’s, and Target. Do they have employees, warehouses, storefronts, or do they have nothing? No, neither do they, because they all have one thing in common, annual receipts.

Small business owners are constantly looking at their competitors and trying to determine if they are meeting size standards. The only way they can do this, of course, is to look at the sales of their products, service, what the competition offers, the size of their sales forces, etc., and make a determination as to whether they are on the same page as the rest of the small business owner. If they are not, then they need to adjust their expectations accordingly. Unfortunately, most small business owners are not willing to change their perception of what is necessary in order to achieve success based on the size of their sales forces and purchase of expensive office equipment.

Okay, so, let me help you by re-examining that definition of ‘a business:”. A business is any endeavor undertaken to promote a profit, create employment, or increase goods or services purchased by the public. Now, the definition of a small business is the definition of a home-based business conducted for profit. That being said, let’s assume that the goal of the company is to provide employment. What does the definition of ‘provide employment’ mean then?

Well, for example, let’s say your company provides home health care, or office supplies to your employees. If the company fails to meet its obligation to those employees, does that employment in fact exist? And if it doesn’t, do you really believe that the small business owner is responsible for those employees? I would submit to you that the answer is no. As a matter of fact, unless the home-based business has employees, the home-based business owner is only responsible for the revenue he creates through his activities, not for the revenue he receives from providing those services to the employee(s).

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