Definition of Small Business

Small businesses are privately owned, partnership, or sole proprietorship which have fewer workers and/or less yearly revenue than a normal-sized company or enterprise. Some of these businesses may be composed of one location, while others may be spread out across the country. The entrepreneurial spirit can come out when these small companies are willing to put forth the effort and time to become successful and be on the leading edge of technological development. Because they possess the entrepreneurial mindset, many small businesses are willing to seek advice from other small business owners as well as expert professionals in all aspects of business and entrepreneurship.

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Definition of Small Business

Small businesses are privately owned, partnership, or sole proprietorship which have fewer workers and/or less yearly revenue than a normal-sized company or enterprise. Some of these businesses may be composed of one location, while others may be spread out across the country. The entrepreneurial spirit can come out when these small companies are willing to put forth the effort and time to become successful and be on the leading edge of technological development. Because they possess the entrepreneurial mindset, many small businesses are willing to seek advice from other small business owners as well as expert professionals in all aspects of business and entrepreneurship.

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There are many opportunities available to small business owners who desire advice concerning the legal structure of their businesses and planning for future growth. One of the many options small business owners have is to seek advice from lawyers who specialize in business laws and corporate laws. This type of lawyer will not only be familiar with local laws that affect small business, but he or she will also be familiar with federal laws that have an effect on small business operations. Many small business owners find it necessary to protect their assets by insuring their personal liability coverage is at a high enough level. To learn more about insuring the personal assets of your small business, log onto the internet and search for “business liability insurance” or “business liability protection.”

The definition of a small business is quite different than the definition used by economists. Economists view small businesses as being those which generate the majority of their revenues from a single source. A small business is not necessarily limited to selling a product or service. Some small businesses also conduct transactions such as buying property, constructing buildings, leasing office space, purchasing equipment, and even banking if they are strictly required by law to do so.

For the purpose of our purposes, we will assume that small businesses fall into one of three categories. First, there are those which derive all of their revenue from one product or service. These businesses can be privately held corporations, partnerships, sole proprietorship, and government institutions. Examples include privately held corporations such as McDonald’s, Wal-Mart, Microsoft, AT&T, and Southwest Airlines. In this example, the business size is directly related to the percentage of revenue generated from any single activity.

Second, there are those small businesses which have revenue that is generated through various activities. In this example, the revenue generated is usually diversified across different products and services. This could include the purchase of a car from a major retailer, the rental of a vehicle from a major car company, the installation of a computer network, or the production of certain devices by a small business. Examples include the retail sales of automobiles, the sales of computer products, and the revenue generated through the production of certain medical devices.

Finally, there are those small businesses which depend on government contracts and help small businesses to achieve the goals established by these contracts. An example of a contract is the construction of an office building. These contracts often require the construction company to purchase equipment and supplies from these companies in order to successfully complete the project. In some cases, these companies help small businesses purchase the needed materials, equipment, and supplies at reduced prices.

While the above examples are excellent representation of the variety of different small business size categories available, the reality is that the true determinant for success for any business is its unique situation and the degree to which it depends on a unique set of circumstances to exist. In order to succeed in this competitive market, a small business must develop a plan that is specific to the type of activities it needs to perform in order to realize its unique competitive advantages. Small business plans can be used to help small businesses set realistic goals and to define realistic timelines and budgets.

The three factors considered in the definition of small business are the number of employees, the geographic location of the enterprise, and the nature of its industry. In order to successfully meet the needs of its customers, a small business needs to employ the correct number of employees required for its operation. The geographic location of the enterprise determines the type of employees who will be needed. The nature of its industry determines the types of supplies and services that will be provided by the enterprise. A small business can also be considered small if it has established a strong customer base. The definition of small businesses is the framework upon which they exist and successful operation requires the development of a sound strategy and the determination of key business goals.

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