Today’s economy is a difficult one for most entrepreneurs. With unemployment and many people not being able to make enough money to survive, many small businesses are closing their doors. However, there is one type of business that seems to be doing well even in the worst economic climate we’ve seen in many years. The small business is still around and thriving. This type of business is called the SBA.
Small businesses are basically privately owned corporations, partnerships, or sole ownerships which have fewer employees than a typical large corporation or business, and/or less total annual revenue. Many small businesses have started as family enterprises, with one or two persons working together, with one owner providing all or most of the workers. The owner can then use the funds they make from the business to live comfortably, giving the employees time and a paycheck. Some owners start small and build up their business until it is profitable; other start small and build up their business slowly, choosing jobs that allow them to grow and expand as their business thrives.
In their basic definition, a small business is any company that has fewer than 2 million pounds in annual turnover. This means that a business with sales of only two million pounds or less must meet the SBA’s annual turnover requirements in order to be considered a small business for tax purposes. The SBA further breaks this down into smaller aspects for each type of business. There are two types of SBA businesses: partnerships and sole proprietorships. A partnership must have an equal number of shareholders and has no restrictions on who can be appointed as officers. There are also sole proprietor businesses that have 100 percent ownership by the owners, have limited liability, and no dividends or capital gains.
When looking for a small business, it is important to take a look at the standards set forth in its annual report to the Congress. An annual report provides the information that is necessary for a small business to continue operating in a manner that allows it to make contributions to society. These reports examine the way a small business manages its finances, handles customers, makes purchases and sells goods, develops its products, and makes all of the decisions related to the operation of the business. Some of the standards that are most often reviewed in these reports include the following: financial health and condition, profit and loss, management of resources, ownership and control, credit policies and practices, sales and marketing, workers’ compensation, employee relations, government policy and compliance, tax affairs and practices, and internal controls. These standards are necessary because many of the most successful small businesses were founded by leaders who had the knowledge, creativity, and determination to succeed. It is important to note that these standards do not always have to be met by all small businesses, and should only be reviewed and evaluated based on the business’s specific needs and opportunities for growth.
When defining what a small business is, another group of people are commonly included in this definition: privately held companies. There are two types of privately held businesses: publicly held and Privately Owned Companies (POCs). A Publicly held company is one which has retained its stock ownership and is listed on a publicly traded exchange. A Private Company is one which is not traded on a publicly traded exchange.
One of the most common ways that businesses are categorized and evaluated is by industry publication. In America, the most dominant business publication is Small Business Magazine. This magazine provides valuable information on all aspects of small businesses, including new trends, new growth markets, alternative capital sources, industry trends, and contact information for selected industry representatives. Other business publications may also provide valuable information on small business size as well as the characteristics of successful businesses.
Another common way that small business is evaluated is by the selected characteristics of businesses that are successfully operated in a local community. For example, if a business is located in a neighborhood that has a low crime rate and a high percentage of employed people with at least a four year degree, the business is considered to be economically healthy. On the other hand, if the neighborhood is known for high unemployment, a high percentage of business owners have at least a two year degree, and the neighborhood is considered to have a high “brain gain” rate, then the business would be considered to have a high “brain use rate.” Each of these selected characteristics is used in the formula to measure the health of a local economy.
The other main economic function that this select economic function covers is trade. It should be noted that this does not include the import and export functions performed by a country. Trade only covers the process by which items are brought into a country from another country. It also requires that the items are exchanged between countries and that the country’s goods are received and exported. Trade provides valuable information on the performance of international trade, because it is the basis for determining the value of the U.S. Dollar and for providing information about our trade deficit. This information is necessary for evaluating the performance of various countries and is especially important when analyzing trade deficit.