If you are running a small business or considering running one, you will directly help with creative and productive output, and economic growth in your community and employment. That is reason enough to consider joining the ranks of small business owners.
It is a proven fact that small businesses employ a large segment of the U.S. population. If it weren’t for small business owners, the GDP of the U.S. would be much lower and unemployment would be much higher.
What Is A Small Business?
A small business is any business that produces annual revenues of $2 million dollars or less. Broken down into simple terms, small businesses account for fewer than 25% percent in services or sales, and can earn as much as 27% or more in annual gross profits.
Why Run A Small Business?
Small businesses are also beneficial to those who start them. There are many people with incredible talents, gifts for invention or creativity that would otherwise be left untapped. They would not realize their true potential by working as an employer of another company or larger corporation.
People who run a small business work the hours they want and need to, while achieving their business goals, giving them the benefits of being entrepreneurs.
Other benefits to running a small business, especially from home, are:
- Lower overhead if just using a home office
- Lower costs for equipment, stationary, business attire and furniture
- More support through government grants, programs, seminars and loans
- Choosing your own health insurance package with discounts as a small business
- Flexibility in working hours
- The freedom to create and invent while making a living
What Are The Disadvantages Of Running A Small Business?
Usually, if planned right from the early stages, most small business will have only a few aspects that make running them a challenge.
However, there are some disadvantages to running a small business that are not necessarily bad, though they can be time consuming. These include:
- A single person small business – one person holds the responsibility for everything
- There are legal limitations to financial assistance amounts allowed for small businesses
- Competing with larger or more established businesses for a part of your chosen market
- Government laws and regulations can be restrictive
- Paperwork is no different for any business, but small business owners may have fewer hands to cope with this and it can sometimes be overwhelming
- Insufficient capital to grow and take on hired help or keep skilled workers
Inflation can affect the growth and profits of the company as expenses grow, while incoming business may remain the same or not grow enough to accommodate the changes
Just like anything, negatives are unfortunately a necessary part of running a small business. But by planning well, you can ensure that your small business is not only successful, but thrives in today’s competitive business environment.
