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Small Business Enterprises

by gbaf mag

Small business is simply defined as a business that has fewer employees than a sole proprietorship or corporation and less than average annual revenue. The definition of “small” in regard to being able to qualify for government assistance and receive preferential tax treatment also varies greatly by industry and country. For example, the United States currently has a very large and powerful small business lobby. The small-business lobby is arguably more powerful and influential than most governments. While there is no doubt that many governments recognize the importance and need for small businesses, the available support, funding and policies are limited.

When compared to other forms of enterprise, there is a strong argument that small business structures create a stronger entrepreneurial environment. The small business structure helps entrepreneurs to test their ideas against highly competitive markets and provide a safe testing environment for new ideas and products. Many small businesses were created by highly motivated young people who had little experience in financial management and were unable to secure traditional financing. In contrast, sole proprietor businesses typically require extensive financing during startup and often have to compete aggressively with larger companies for valuable patents and other assets.

Of course, the current generation of entrepreneurs has not been spared from the lack of security and other challenges inherent in small businesses. Entrepreneurs today face a multitude of challenges such as economic uncertainty, decreasing customer access to products and services, increasing operating costs and overall difficulty building customer loyalty. To address these issues, entrepreneurs have taken different approaches. Some have turned to technology to develop new products and solutions while others have adopted complex and expensive quality management systems.

One approach that many small business owners have taken is to turn to the technology community to help them develop their products. Most large technology companies today offer a wide range of software development and distribution services, including web development, site building and SEO services. Because these services are not usually considered part of the “old” small business model, they can be a highly cost-effective way to build the core infrastructure of a small business enterprise. In addition, because technology companies have developed a strong commitment to customer satisfaction and value creation, they tend to have established relationships with other important stakeholders such as bankers and lawyers that can help provide the necessary additional capital and credit lines needed to launch a venture. Technology companies that offer these services can also help provide the resources and support required to grow a business, should the need arise.

In addition to turning to technology to help them develop and manage their businesses, many small business owners have also chosen to go the “middle-market” route and seek the services of small business consultants. While this solution can prove useful, particularly in areas where small business needs are most acute, it does come with its own challenges. Small business consultants will not be able to provide a comprehensive solution to all of the issues facing mid-sized and small businesses. For this reason, it is important for small businesses to understand their options and determine what suits their particular set of needs best. This involves engaging an experienced consultant who can work closely with the small business owner to explore all of the options available and recommend the most appropriate course of action.

Many small business structures today include limited liability companies (or LLCs), and few allow for s-corporations. Limited liability companies are designed to provide limited liability for the activities of its owner(s). An s-corporation, on the other hand, is a legal corporation that allows many of its ownership stakeholders to have access to the company’s assets and profits. (While an LLC may seem like a better choice for most small business structure options, an s-corporation can actually offer greater protection to the interests of its shareholders.)

The development and growth of a small business enterprise is highly dependent on the entrepreneur. It is through the entrepreneur that new technologies, marketing strategies, business plans, and other details are formulated. Without the input of the small business owner, however, these details remain theories and will prove irrelevant once operational procedures and goals have been defined and are written down. This process must be collaborative. All parties involved in a small business must work together to identify the purpose of the enterprise, set the goals to be achieved, and develop the methodologies necessary to make those goals a reality.

While many small business enterprises fail, it is also true that some succeed. The key to success lies in the hard work, innovation, creativity, and perseverance of the business owner and his or her team. Successful business ventures rely heavily on the entrepreneur, as his or her knowledge of the marketplace, his or her ability to lead teams and individual executives, and his or her knowledge of business practices to help shape and direct the direction of the enterprise. With the right resources, a determined entrepreneur can create a successful business enterprise.

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