Meaning and Nature of Small Business

Why Small Business?

The history of this small business venture dates back to 1953. The small business was foremostly created to replace Reconstruction Finance Corporation which is an independent US government agency who dealt in primary objectives in the face of economic depression. The small business hence originally started in the US.

The courage of risking and starting a venture is a dream which even the common man aspires to. In order to make this a reality the small business is a type of venture that will suit his requirements and give him the satisfaction of doing a business. Along with the success, small business has many added advantages as well. 

1. Independence –

Being the business owner, the owner is the only boss here. Hence, he can operate by taking his own decisions which are crucial to the business’s success. 

2. Lifestyle –

With owning a small business, lifestyle is in self-charge. The owner is free to decide when and where to work, how to spend the time.

3. Financial Rewards –

Small business ventures are not as exposed to external threats as the big business ventures are exposed to. Also, the owner is single who is the boss leading the business thus all the profits and the gains are consumed by the owner solely. 

4. Learning Opportunities –

The business owner participates in every facet of the business, he is constantly engaged in opportunities which help them to learn and understand various business functions. 

5. Creative Freedom and Personal Satisfaction –

For efficient work, freedom and doing what is personally satisfying is the utmost rewarding. The owner of this business has the freedom to create his own business by which they will be personally satisfied by using his own ideas and own methodology. 


What is a Small Business?

Small businesses are the private corporates, partnerships, or sole proprietorship which work with few employees and lesser annual revenue. The businesses are defined as small in the aspect of size and from the aspect of governmental support. The small businesses qualify for preferential tax policy, the tax policy is dependent on the country and the type of industry. 

Examples for small business include – service or retail operation like convenience stores, small groceries outlets, bakeries, hair salons, carpenters, electricians, guest houses, photographers, small scale manufacturers, Web Designers.

Other professionals also work in small business sectors like doctors working in small clinics, lawyers and accountants who work in their chambers. These all are examples of small business. 


Types of Small Business

Even while we look outside, we see different types of small business which dwells in our vicinity itself. In our daily interactions, we come across various types of small businesses.

Services Provided by Small Businesses

Business

  • Bookkeeping, accounting, taxes

  • Consulting; marketing/market research, career, management

  • Social media administration and management

  • Tax preparation

  • Public relations

IT & Internet

  • Development; front end, games, apps, etc.

  • Freelance IT services

  • Podcasting

  • Search engine optimization consultant

  • Website design and/or maintenance

Food and Hospitality

  • Bed and Breakfast

  • Catering

  • Event planning

  • Event space rentals

Physical Labour with Limited or Easy-to-learn Skills

  • Handyman

  • House cleaning

  • Landscape maintenance

  • Moving and hauling

Specialized Skills (some require licenses, certifications or other credentials)

  • Bartending for private parties and events

  • Car repair

  • Copy or content writing

  • Graphics design

  • In-home beauty services

  • Interior decorating

  • Massage therapist

  • Music lessons

  • Personal chef

  • Personal trainer

  • Dog grooming

  • Photography

  • Private lifeguard

  • Nutritionist/Weight-loss coach

  • Real estate

  • Sewing and alterations

  • Sports coach

  • Translator

  • Tutoring

  • Videotaping and editing

Miscellaneous

  • Blogging

  • Child or senior care

  • Dry cleaning

  • E-commerce

  • Genealogy research

  • Life coaching

  • Organizing; home or office

  • Travel planner

  • Virtual administrative assistant

FAQs (Frequently Asked Questions)

1. What is Economic Depression?

Ans:

Economic depression is a sustained and long-term downturn in economic activity in one or more economies of the world. It is a more severe economic downturn than a recession, as it slows down an economic activity over the tenure of a normal business cycle. Economic depressions are known for their length, by job scarcity, less output as buyers stop their purchase to save money and suppliers cut back on their production and investment. Price deflation, financial crises, market crashes are all part of depression.

2. What are the Characteristics of Small Businesses?

Ans. The characteristics of small businesses are as follows – 

  • Lower revenue and profit.

  • Lesser employees.

  • Small market area.

  • Sole or partnership basis taxes collected.

  • A limited area with few locations.

3. What is the Role of Small Businesses?

Ans. Small businesses make their contribution to local economies by bringing growth and innovation in the community. The business establishes itself in this manner by contributing the society. Small businesses help to enhance economic growth by providing employment opportunities to many people who may not be qualified enough for the larger corporations.

4. What are the Advantages and Disadvantages of Small Business?

Ans. Everything comes in its pros and cons, likewise small business has its own advantages and disadvantages. The advantages of small business are –

  • Financial Rewards.

  • Independent Lifestyle.

  • Personal Satisfaction and Growth.

While the disadvantages are as follows – 

  • Financial Risk.

  • Stress and Health Issues risk.

  • Time commitment factor.