The term “small business” refers to any type of business that has fewer than 100 employees, but which operates on a for-profit basis. Small businesses are generally privately owned enterprises, partnerships, or sole ownerships which have fewer employees and / or less annual sales than an average-sized enterprise or corporation. There are many different types of small businesses. Some of the most popular are home based businesses, internet based businesses, retail sales businesses, franchises, and licensing opportunities. Home-based businesses are usually run from a home office; internet based businesses operate over the internet from various locations, some of which may be multiple addresses.
In some cases, small businesses employ individuals who are not necessarily employed by the company, although these businesses may include franchises and online businesses employing thousands of workers. There are also some types of small businesses that hire only part-time employees and, therefore, have no payroll expenses. These businesses may include freelancing workers, contract workers, and independent contractors. Freelance workers are typically offered pay rates competitive with prevailing wages in their area, depending on the individual situation. For example, if an independent contractor provides services that are necessary to the well-being of a patient in a healthcare setting, that person may be paid a reasonable rate for those services.
The term “small business” itself has a somewhat broader meaning than it did prior to the twentieth century. Prior to this period, small business was typically referred to as a “factory” or “directly supervised” operation. Factory operations were characterized by large numbers of employees, a centralized management structure, and standardized work procedures. Directly supervised operations had few employees, the management was often extremely flexible regarding workers’ hours, and there was little coordination between different departments. All of these factors led to lower levels of productivity, in addition to lower profits. Since the 1970s, however, there has been a gradual tendency toward more small business operations, as companies have become more flexible with their labor policies and have been able to attract and retain qualified workers by offering attractive compensation and other benefits.
Regardless of whether your business is run from a warehouse or a garage, there are a number of things that make up a small business, including production volume, number of sales or customers, and your customer base. Your home-based online business, as a result of its lower overhead and online business plan, can achieve the same goals of large businesses. It is important to start planning for the home business of your dreams as soon as possible, because the marketplace is more competitive today than ever before. The Small Business Administration offers many helpful resources online, including business plan templates, sample grant proposals, and even online training for successful entrepreneurs.
One of the important considerations for any small business is the ability to choose which characteristics are most important to you and that contribute most to your company’s success. This is referred to as the “Selected Characteristics Index” and is determined by observing how employees react to a certain situation. Assessments are conducted each year, and a small business owner may be able to use one of the following methods to create their own “Selected Characteristic Survey.” Most survey participants are asked to rate their level of satisfaction on several selected characteristics.
Surveys ask employees to rate how satisfied they are with their jobs, their relationships with supervisors and coworkers, their work performance, and so on. These results are then compared with the company’s performance in several areas – customer satisfaction, profits, market share, etc. – to determine which aspects of small businesses need improvement. This process is useful because it allows small businesses to look at their own employees as potential future leaders and managers. Employees who excel in one area are more likely to succeed overall in small businesses.
Another way to gather information that will help you better understand your competition and develop strategic plans and programs is to look at the performance of small businesses of a similar size and scope. The Small Business Administration (SBA) conducts annual research surveys to provide information on employment trends and the quality of small business ownership and leadership. Surveys also provide information on issues facing small businesses and opportunities for growth.
One of the best ways to get the real picture about small businesses is to participate in a small business owner’s forum. There are online forums where SBA Members can discuss issues of importance to small business owners. You can learn about the latest trends and research studies and find out what business skills and experiences your employees possess that could be valuable. You can also network with other small business owners to build partnerships and share ideas.