Small businesses, also called ‘Solo Retailers’ or ‘Home Businesses’, provide the backbone of the modern economy. They represent a significant proportion of the U.S. economy and employ more people than the combined workforce of the Department of Labor and the retail industry. There are several advantages to owning and operating a small business. These advantages include a flexible schedule, lower overheads, and the ability to work at home.
Many small businesses in several countries across the globe include retail or service operations like supermarkets, small grocery shops, boutique shops, convenience stores or petit restaurants (e.g. hairdressers, carpenters, auto mechanics or house cleaners), personal care services, personal contractors, travel agencies, and Internet related businesses (e.g. web design and related computer programming). In Australia, there are around 55 governments and non-government small businesses in the manufacturing, research, development and energy sector.
Starting a small business involves less paperwork compared to starting an established business and is therefore easier to qualify for a Business Environment Assessment (BEA). Furthermore, small businesses are often owned by people who have successfully operated and/or own other businesses. There are numerous self-employment options available to people with the entrepreneurial mindset. As a result, the rate of entrepreneurship is growing at a fast pace.
Advantages to Owning and Operating a Small Business The advantages to being a home-based self-employed entrepreneur includes the freedom to set your own working hours; ability to make personal choices; ability to select and complete work according to your preferences; ability to own and run your own company; ability to be your own boss; flexibility to set your own priorities; ability to be your own boss; no immediate family obligations; no legal obligations to other companies. Another advantage to operating your own home-based business is the ability to have full control over your financial future. By running your own business, you are in complete control of your income and expenses. In addition, you decide how much to invest in your business. Moreover, you determine the fate of your business by choosing whether to expand it, downsize it or close it down. However, all these advantages also come with disadvantages such as not having the freedom to work when you want, being forced to conform to certain work schedules, dealing with heavy investment costs and not having the control over your financial future.
Cost Reduction The greatest benefit of owning a small business is that it comes at a cheaper cost. This is mainly because most of the tasks are performed at the location of the business. Also, most small businesses do not require major capital investments. These two factors together mean that small businesses have the potential to cut down operational and management costs.
Flexibility One of the advantages of having your own business is that you have the freedom to manage it how you see fit. As a small business owner, you can set your own priorities, decide which issues or problems to focus on and take corrective measures. This gives you the ability to make the necessary changes. Also, many small business owners find it more enjoyable than a nine to five job. Some small businesses offer benefits, additional pay or medical benefits for their employees. Some even provide house or pet care to their employees.
Tax Advantages Small businesses are usually treated as an income generating venture and this means that the business has to pay taxes. Most of them however do not need to pay income tax until they release profits. If you operate your business at home, you do not need to pay income tax unless you use a certain percentage of your profit as your taxes. In addition, most small businesses are considered non-profit which also means that they do not have to pay corporate taxes such as in the case of businesses which receive income from the federal government or state governments. A large portion of the tax exemption that business owners enjoy is due to the size of the enterprise.
In conclusion, one of the major advantages of owning small businesses is that you have complete control over the way you run the business. You have the luxury of hiring a staff or marketing mix that works well together and can help increase sales. You also have the freedom to be your own boss and hire your own employees. These advantages make small businesses more appealing than other start ups especially for people who do not have much experience running a business.