small_businessWhat is a small business?

A small business is a business that is independently owned and operated, with a small number of employees and relatively low volume of sales.

Different countries have slightly different description for a small business.

For example, in United States a business have less than 100 employees is considered as a ‘small business’, whereas it is under 50 employees to qualify as a ‘small business’ in European Union.

In Australia, a small business is defined as 1-19 employees.

Small businesses are normally privately owned corporations, partnerships, or sole proprietorships.

Apart from number of employees other criteria for classifying a business as ‘small’ are:

 

Importance of small business in the economy

As we all know that small firms are important for the economy.

 

Small businesses face the following problems

How can small business survive?

Small firms survive by being different (product differentiation). They can survive by