Small business is basically defined as a privately owned company, partnership, or Sole proprietorship which has less than 5 employees and lower than $10 million in annual revenue. The definition of “Small business” in regards to eligibility for government assistance and qualify for favourable tax rate varies greatly by industry and country. It’s important to understand the difference between a small business and a small industry, which can be confusing at best. It’s also important to comprehend the difference between a C-corporation and a S-corporation.
A S-corporation is comprised of all the publicly-held shares (stock) of a company. So instead of referring to small businesses, we are actually talking about big business. Big business has its own legal structure and is generally run as a company with one CEO and many owners and employees. The owner-manager of a S-corporation is usually responsible for day-to-day operations of the company. The C-corporation is typically just an employee of the parent company with no specific role in day-to-day operations.
Most small businesses are actually one of many owner-managers. Owners can be owners, but they usually delegate part or all of their time to employees. They still have to pay taxes, contribute to profits, and receive benefit cuts in order to remain a company owner-manager. That’s why we call it “ownership” instead of “ownership” or “active control”. Owner-managers must provide their employees with a good work environment so that employees are happy to work. Good bosses have a positive impact on employee morale and productivity.
How can you make sure that your business has a quality management system? You don’t. Yet every owner-manager of a small business is responsible for creating quality control systems. If a business is organized around quality, then the product end result will be excellent. If a business isn’t organized around quality, then the quality of the products or services produced may suffer and customers won’t buy them.
The top small businesses in America are those where customers buy a high percentage of the products or services produced. These businesses typically hire a large number of employees, and they have high revenues. In order to attract these customers, you need to offer products and services that exceed your competitors’. They don’t need a large sales force to make them want to be your customer.
Top small business organizations are also those where most of the owner-managers grew up. They understand that creating a profitable business requires long-term commitment. The majority of owner-managers grew up using a paycheck. So they have been schooled by experience to understand the value of a customer, the importance of providing good products and services, and the need to keep shareholders happy.
The most common small business valuation is the income statement. It’s comprised of income from operations, assets, liabilities, and equity. The income statement measures your business’ performance compared with an investment grade, all other things being equal. If your business has grown substantially over the last ten years, your income statement will show much higher than expected revenue and the stock price may reflect this additional value.
Many business owners have tried to “think” their way to success without considering a sustainable strategic plan. A sustainable strategic plan is made up of predetermined goals, strategies, timelines, target dates, and funding requirements. Owner-managers rarely spend a moment thinking about what a roi, a business’s profit, loss, and revenue look like. Most often the reason that the owner-managers fail to create a strategic plan is that they don’t know what they are looking for.
Businesses often fail for one of two reasons: either they don’t understand their intercity customers, or they don’t understand how to communicate with them effectively. Most small business owners understand that they need to be on top of their customers’ minds at all times. However, the typical exhibit booth does not have enough space to display an entire calendar, much less an entire sales message and all of the graphics associated with it. If you have a limited amount of time and inadequate advertising funds, you should consider purchasing a pop up exhibit booth. These exhibits make it easy for your exhibit technicians to place your message on the exhibit, yet they do not require an investment in heavy equipment.
The third mistake that many small businesses make is that they fail to develop a succession plan. The most successful companies realize that businesses die in one or two generations. Therefore, they have developed internal policies, structures, and plans to prevent succession from becoming a problem. A succession plan should include an exit strategy, a replacement plan, and employee succession planning. If your business has failed to establish a succession plan, this may mean that you are leaving your company and your employees in a terrible situation.
Even if you are able to overcome the mistakes above, there is still a good chance that your business will fail. All too often, small businesses do not take the time necessary to properly assess their cash flow situation. They fail to obtain financing when they absolutely need it, they fail to provide management training, and they fail to improve employee performance. Many small business owner-managers make the fatal mistake of believing that cash flow will solve any financial issue. Unfortunately, this can be a fatal misstep for many small businesses. For these reasons, many small businesses choose to outsource Intercity bus and taxi service, which significantly reduce their on-site manager complement and significantly increase their chance for financial failure.