If you’ve ever paid attention to American politics, one phrase that gets batted around constantly is “small business.” Small business are praised as the foundation of the country, lauded as pinnacles of the American dream, and used as political leverage in a variety of contentious issues. But what is a small business? Is small business in the US really as big of deal as it’s made out to be?
A definition of what is a small business and what is not is difficult to pin down. Some definitions are based on the number of employees and can differ by country. For example, in Australia a small business is defined as having fewer than 20 employees. The European Union defines a small business as having less than 50 employees. Small business in the US is defined as a business having less than 500 employees. Other definitions consider the income or the total assets of a business in order to determine if that business qualifies as small. Thus, it’s very difficult to pin down what a small business is.
What Small Businesses Do
Politicians of all stripes tend to elevate small businesses for good reasons. First, small businesses do help the local economy. This help is due in part to the “buy local” mentality that has been sweeping modern culture. The idea is that the money spent at small businesses invests locally as opposed to going to corporate headquarters elsewhere. There’s also the tendency of small businesses to purchase their own materials locally, adding to the vibrancy of a local economy. Second, small businesses boost the ideal of individuality and independence, hallmarks of American culture. One often hears from the owner of a small business in the US that they enjoy being their own boss and making their own decisions. Third, small businesses create jobs- around 2/3 of all new jobs in the US are provided by small businesses.
Struggles of Small Businesses
Owning or working for a small business is not always sunshine and rainbows; they come with many significant challenges. Small businesses can go under financially relatively easily without the support of a massively profitable corporate entity. In other words, small businesses begin on their own, and often fail on their own. Small businesses also usually entail long and grueling hours for owners and employees. Additionally, there are insurance concerns for the business itself, the customers, and the employees. Finally, there’s the well-known worry that the big companies will simply squeeze small businesses out of the market. Thus, building a small business in the US is not an easy task, and business know-how is extremely important.
The Benefit of Small Businesses
The potential downfalls of a small business, should not detract from its many benefits. First, in the Internet age, the small business is perfect for online commerce. Making and selling items online without the need for a physical store makes setting up a new office relatively easy. Many such businesses can and are just run from home! Second, small businesses tend to be more manageable than unwieldy big businesses. In other words, a small business owner can really maintain total control over his or her business without the need for secondary managers. Third, small businesses bring about greater customer service opportunities. When the customer and the seller have the time and ability to be directly in contact, a much more personal connection can be made. Finally, small businesses can be tailored to a community and its unique needs. Some shops are only suited for snowy, woody areas whereas other shops are perfect fits along the beach. Small businesses allow a personal connection unavailable with massive impersonal businesses.
So what is a small business? It’s a lot of things. It’s a strictly defined entity, it’s an expression of opportunity, and it’s a part of a community. If you think a small business is right for you and you’re considering where to study business in the US, consider which schools and which areas of the country may be the most beneficial for your goals.