Small business
[1] Small businesses in many countries include service or retail operations such as convenience stores, gun shops, antique shops, small grocery stores, bakeries or delicatessens, barbers, hairdressers or tradespeople (e.g., mechanics, plumbers, carpenters, electricians), car dealerships, laundromats, dry cleaners, restaurants, motels, photographers, very small-scale manufacturing, and Internet-related businesses such as web design and computer programming.
On the other hand, other small businesses, such as day cares, retirement homes, and restaurants serving liquor are more heavily regulated and may require inspection and certification from various government authorities.
Lenders also often skirt organizational (corporate) boundaries by seeking personal guarantees or accepting privately held assets as collateral.
The entrepreneurs of startups typically aim to scale up the company by adding employees, seeking international sales, and so on, a process which is often but not always financed by venture capital and angel investments.
Successful entrepreneurs have the ability to lead a business in a positive direction by proper planning, adapting to changing environments, and understand their own strengths and weakness.
In addition to the number of employees, methods used to classify small companies include annual sales (turnover), the value of assets and net profit (balance sheet), alone or as a combination of factors.
[11] The United States census data for the years 2014 and 2015 shows the women's ownership share of small businesses by firm size.
The small business owner can leverage a strong brand name and purchasing power of the larger company while keeping their own investment affordable.
[13] Many small businesses can be started at a low cost and on a part-time basis, while a person continues a regular job with an employer or provides care for family members in the home.
Small business owners possess the flexibility and freedom to make their own decisions within the constraints imposed by economic and other environmental factors.
Small businesses (often carried out by family members) may adjust quicker to the changing conditions; however, they may also be closed to the absorption of new knowledge and employing new labor from outside.
The European Union's Directive on annual financial statements of 2013 aims to "limit administrative burdens and provide for simple and robust accounting rules, especially for small and medium-sized enterprises (SMEs)".
It is a common rule of thumb that the entrepreneur should have access to a sum of money at least equal to the projected revenue for the first year of business in addition to the anticipated expenses.
[25] In the United Kingdom and Australia, small business owners tend to be more concerned with perceived excessive governmental red tape.
In general, small business owners are primarily focused on surviving rather than growing; therefore, not experiencing the five stages of the corporate life cycle (birth, growth, maturity, revival, and decline) as an entrepreneur would.
[29] Over half of small firms lack a business plan, a tool that is considered one of the most important factors for a venture's success.
Although this may seem positive, in reality, the growth is slow, as small business owners shy away from exporting due to actual and perceived barriers.
[37][38] Small businesses can encounter several problems related to engaging in corporate social responsibility, due to characteristics inherent in their size.
This results in a lack of time for the owner to coordinate socially responsible efforts, such as supporting local charities or not-for-profit activities.
[39] Additionally, a small business owner's expertise often falls outside the realm of socially responsible practices, which can contribute to a lack of participation.
Because small businesses have more personal relationships with their patrons and local shareholders, they must be prepared to withstand closer scrutiny if they want to share in the benefits of committing to socially responsible practices or not.
[42] Both lower wages and fewer benefits combine to create a job turnover rate among U.S. small businesses that is three times higher than large firms.
Common marketing techniques for small business include business networking (e.g., attending Chamber of Commerce events or trade fairs), "word of mouth" promotion by existing customers, customer referrals, Yellow pages directories, television, radio, and outdoor ads (e.g., roadside billboards), print ads, email, and Internet marketing.
[citation needed] Successful online small business marketers are adept at utilizing the most relevant keywords in their website content.
The relational nature of social media, along with its immediacy and twenty-four-hour presence lend an intimacy to the relationships small businesses can have with their customers while making it more efficient for them to communicate with greater numbers.
In addition to the social networking sites, blogs have become a highly effective way for small businesses to position themselves as experts on issues that are important to their customers.
[51][52] Recent research suggests that the use of credit scores in small business lending by community banks is surprisingly widespread.
In October 2010, Alejandro Cremades and Tanya Prive founded the first equity crowdfunding platform[54] for small businesses in history as an alternative source of financing.
The largest regional small business group in the United States is the Council of Smaller Enterprises, located in Greater Cleveland.
[63] Several youth organizations, including 4-H, Junior Achievement, and Scouting, have interactive programs and training to help young people run their own small business under adult supervision.
