Small businesses are privately owned corporations, partnerships, or sole proprietorships that have fewer employees and/or less annual revenue than a regular-sized business or corporation. Businesses are defined as “small” in terms of being able to apply for government support and qualify for preferential tax policy varies depending on the country and industry.
Small businesses in many countries include service or retail operations such as convenience stores, small grocery stores, bakeries or delicatessens, hairdressers or tradespeople (e.g., carpenters, electricians), restaurants, guest houses, photographers, very small-scale manufacturing, and Internet-related businesses such as web design and computer programming. Some professionals operate as small businesses, such as lawyers, accountants, dentists and medical doctors (although these professionals can also work for large organizations or companies). Small businesses vary a great deal in terms of size, revenues and regulatory authorization, both within a country and from country to country. Some small businesses, such as a home accounting business, may only require a business license. On the other hand, other small businesses, such as day cares, retirement homes and restaurants serving liquor are more heavily regulated, and may require inspection and certification from various government authorities.
Scope of Small Business
- Shoestring Budget
A sole proprietor or a small group of people operate small businesses. These businesses often run on ‘shoestring budget’ meaning that small businesses function on a very tight budget.
- Labour intensive
Small businesses are mostly labour intensive. Various types of small business largely rely on labour for their functioning. The primary nature of small businesses is more involvement of physical work rather than intellectual work. The lack of machinery makes the employees manage their operations manually.
- Community based
Small businesses are started with the motive of satisfying the needs and demands of a local area or community. These businesses demographically target few areas of concentration and are hence community-based.
- Indigenous technology
Due to small businesses being community focused and labour oriented they often thrive upon native methods of operations. In India, there are many businesses in the rural sector that still use outdated technology. This might give uniqueness to the products but hinders the development of the business.