Small business is a huge part of the American economy, employing nearly half of America’s private sector workforce and accounting for 43.5% of its gross domestic product. Small businesses are also credited with creating the majority of new jobs and for exporting more than any other sector.
But owning a small business isn’t for the faint of heart. It requires determination and the ability to plow through the tough times. Whether it’s finding new clients, keeping the books in order or hiring the right people for your company, these are just some of the challenges small business owners face every day.
The official definition of small business varies worldwide, but generally speaking they are privately owned and operated for-profit entities that are less than a certain number of employees or annual revenue. In the United States, the Small Business Administration uses a combination of criteria including employee numbers and annual receipts to determine whether or not a company qualifies as a small business.
Even though there are many benefits to running a small business, the most important thing is to be realistic about your financial capabilities. Nothing can hold a business back faster than money problems. That’s why it’s crucial to understand your target market and conduct a thorough business analysis before diving headfirst into your dream of being a small business owner. And it’s equally important to be clear about the structure of your company from the outset, because this can have significant legal and tax implications.
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