Small Business for Independent Economic Developer
Small business is a term used for business privately owned with a small number of employees and low volume of sales. Sometimes, a big business also started as a small business. A micro enterpriser originated from the lack of budget and the idea of starting a business from simplicity.
Some examples of small business ideas are convenience stores, bakery shops, salons and hairdresser, photographers, and many more. A small business can be a good choice of someone who wants to start business with financial limits and the consideration of debt risk. Micro enterpriser opportunities are not hard to be found because it started from the owner’s intention itself.
Small Business Types
There are several types of small business organization based on their structures. They are Corporations, Limited Liability Company (LLC), Limited Liability Partnership (LLP), Sole Proprietorship, and Nonprofit Charitable Organizations. Franchise is also one important part of a small business. Franchising is a type of small business, in which the owners make benefits as being an independent business part of a big business.
McDonalds is one example of a franchise. The person franchising the business could be the boss or main manager of the franchised business in their area, and have an independent action through the franchised business, but still has to obey the main rule of the franchiser.
The difference of those types of small business lies on their structure of organization, the common number of their organization’s employee (the size of the organization), the profit sharing procedure, the tax procedure and payment system, and the managerial and stakeholder structure.
Usually, a small business is also not open for shares and bonds. Once they turn to be a grown and big business, they could open for IPO at any time they are able to. The legal definition of “small” varies by country and by industry. Before running your own micro enterprise, you could have a look for some small business plan example at Medias to support your basic plan.
Small Business Advantage
Small business can give much advantage compared to big business, since a small business can be started at a very low cost and on a part-time basis. The first is the advantage of being independent and free. Freedom to operate independently is a reward for small business owners. Then, they also can be responsive to the stakeholders.
Since micro enterprise didn’t own much complicated structures, even us as the owners can be closer to conversations with customers and even be friends with them who usually shows up as our loyal customers. The third is financial advantage. A small business didn’t have that huge responsibility in taking care of taxations and complicated salaries. Since it only owns numbers of employees, the salary system can still be handled manually.
The fourth is that the risk owned by small business is just smaller than big business. Small business didn’t take much risk on damaged inventories, huge debt and problems after bankruptcy, and competitive risk that usually be one of the most complicated problems of big business.
Small Business Problems
Despite from its advantages, small business also owns numbers of problems, mostly because of its size of business. Most of the propietor doesn’t have good strategy in planning on money and revenues. That’s what usually caused an undercapitalization which can lead to bankruptcy.
Another problem is that sometimes small business started by an inexperienced owner, or owner which lacks of managerial skills. Worse, in some countries, small business started from majority of people who are forced to do business because they couldn’t do anything else.
Separated from the theory that a good entrepreneur should start their business by looking at market chances, this propietor are usually those entrepreneurs who’re not doing so.
They’re the entrepreneurs who do business just because they have nothing else to do to support their life. The competition factor with the big business is also one problem to small business executors. Big business has more power and usually has big impacts and influence to the small business.