What Is the Definition of a Small Business?
According to the US Census Bureau, about 99.7% of all companies in the United States are small businesses. While there’s no consensus as to what constitutes a small business, the Small Business Administration (SBA) usually considers a company with fewer than 500 employees to be a small business.
Apart from the number of employees, the SBA uses other factors to determine whether a company is a small business. For example, is the business headquartered and operate in the U.S., is it a minority player, is it independently owned, is it a profitable venture etc.
The reason why businesses are classified as a small business is that the management and operational issues of these businesses differ vastly from large corporations. By defining themselves as a small business, you can win contracts and avail business loans from the government. You also get access to tools that can help you compete against larger businesses.
Unlike large corporations, small businesses have limited budgets, far less bureaucracy and maybe catering only to a regional geographic area. They’re often focused on providing high-quality customer service and using creativity and innovation to create better products and services.
What Is Small Business Management?
From creating a business, determining funding requirements, managing employees, overseeing marketing and advertising and managing your own time, small business management involves coordinating all aspects of the business to ensure that it keeps on growing and achieves success.
Here are the ten things you should know about small business management:
Create a Business Plan
To create an effective business plan, outline your business goals and objectives and provide a succinct description of your business and the products or services. Include the details about the market you’re about to enter, your marketing and sales plans and your financial projections.
Review your business goals regularly to see what’s changed, what’s been achieved, and what needs to be revamped.
Separate Your Personal and Business Finances
Since the taxes for you and the business are calculated separately, it’s necessary to open separate personal accounts that are designated for only business transactions.
Determine Funding Requirements
If you’re starting a new business, funding the operations of the business is the topmost priority. Whether you’re opting for personal investment, angel investment, business incubators, bank loans or government grants, it’s important to familiarize yourself with the advantages and disadvantages of these funding sources as well as the criteria they use to evaluate the business.
Hire the Right People
If you want your business to thrive, it’s important to hire motivated, high-energy trainable people who are looking for success rather than making a quick buck. As a small business owner, you need to know how to retain valuable employees by offering them perks such as flexible schedules, happy hours and team building activities.