When people start their own small business, there are usually two goals they have in mind: first, to be their own boss; and second, to build a larger business later on. Both of these are legitimate and worthy goals to have, but to reach them, you need to follow a number of small business principles. Here are seven guidelines that will help you succeed with your own small business:
Many small businesses are solo owned by individuals with no family, no significant other, or other group of people with whom they interact. Others are run by small businesses that employ a staff of regular employees who are supervised by managers. In either case, the goal is the same: to make a profit. Therefore, profits are the ultimate bottom line, because without them, there will be no income. Profits and losses must be reported on the company’s income statement along with quarterly and yearly profit and loss statements.
The definition of a small business is any business with fewer than fifty employees, when conducted under the law. It does not necessarily mean that the businesses have fewer goods or services than fifty employees. Instead, it simply means that the businesses’ products or services sold to customers are fewer than fifty in a particular category. Most small businesses fall into one of these categories: health care, personal and cosmetic, retail sales, information technology, and small manufacturers. Most small businesses only employ six to ten employees in offices located on a manufacturing unit, warehouse, or other location. If you fall into one of these industries, you have a small business employment definition that meets our guidelines for government grants.
A small business is considered small if it receives only one percent or one penny of federal assistance per year in direct spending. The selected characteristics of these small businesses are important factors for our grant writers. For example, is the business directly involved in the medical or health-related industries? Are sales revenue generated primarily from health care services? Do customers make purchases primarily from the health-care industry?
The selected characteristics also include trading businesses. Some small businesses conduct trading activities, which means they receive an income from selling another person’s or entity’s products. Other trading businesses may buy goods in bulk, resell to others, or operate warehouses. We consider all these trades to be direct sales unless they involve travel.
A small business is considered small if it provides information technology services to customers. The selected characteristics must provide information technology support, management, support, training, and other programs that allow the business to effectively communicate with customers and other relevant personnel. It must also provide staff members with knowledge, skills, and opportunities for learning and development. In this case, staff members would be considered eligible for employment.
The third factor considered is size standards. Businesses are required to choose specific size standards for FBO’s and LPOs. The size standards generally follow the United States Labor Code, as modified by state law. To qualify for the classification as a small business, businesses must have employees of a specific size. This size standard is usually based on the number of full-time equivalents (FTE’s) used to calculate payroll and benefits.
An important note to consider is that because FBO’s and LPOs typically have significantly lower payroll and overhead expenses than traditional businesses, they do not need to meet the same employment and employee benefits standards as do traditional businesses. In general, an FBO or LPO has fewer employees than a traditional corporation. Because there are fewer employees, the defined benefit and other plans typically do not require the same employee benefits as a traditional corporation. Although FBO’s and LPOs typically have fewer employees than most other small businesses, the definition of a small business is subject to change annually based on the current composition of the United States workforce and the laws and regulations governing those employees’ eligibility for coverage.