A small business is a privately owned corporation or partnership. It is characterized by lower sales and revenue than larger businesses. This type of business requires less capital investment and fewer machines. However, a small business still requires a business plan to be effective.
Small businesses are commonly defined as companies with fewer than 1,500 employees and under $38.5 million in average annual revenue. In order to be eligible for SBA grants, a small business must meet specific revenue requirements. Some of the most common types of small businesses are sole proprietorships, limited partnerships, and limited liability corporations.
Sole proprietorships are the simplest type of small business. They are also the easiest to form. They are typically operated by one person. Taxes for sole proprietorships are handled on the owner’s personal tax forms. Limited partnerships and limited liability corporations are more complex. Generally, they are formed on a state-by-state basis. The members of a limited partnership are responsible for the day-to-day operations of the business, but they have limited involvement in the management of the enterprise.
Small businesses can be virtual or physical. Virtual businesses are often carried out online and require little startup or inventory costs. These businesses give owners greater flexibility.
There are many different industries that can qualify as small businesses. These include: healthcare support, community and social service, technology, food preparation, and personal care. Each of these sub-industry has its own size and revenue requirements. If a small business specializes in one of these industries, it may be eligible for government contracts. Similarly, if a small business is geared toward a local market, it may be eligible for a grant that provides technical assistance to help the business grow.
Many small businesses are able to sustain themselves by employing only a few people. For example, a small-scale manufacturing company may employ only one person to do the bulk of the work. This type of operation is sustainable because the individual does not have to hire others to fill in the gaps.
Larger, more complex businesses require more employees and machinery. For this reason, it is important to plan ahead. When you have a good idea of what you want to do and what resources you have to get it done, you are well on your way to starting your own business.
In addition to identifying which type of business you should start, you will need to determine if you are eligible for a loan from the Small Business Administration. Getting a loan from the SBA can boost your annual revenue and allow you to take advantage of government contracts and other resources.
If you do qualify for a loan from the SBA, you will need to submit an application and complete a thorough review. This can involve a meeting with a lender. You will need a business plan to show the SBA that your business is viable and can afford to pay back the loan. Lastly, you will need a business bank account to keep your personal and business finances separate.