Small business is the backbone of our economy. They drive innovation, create jobs, and largely provide goods and services to our communities. But running a small business is not without its challenges, from legal and tax obligations to day-to-day management. With 33 million small businesses in the United States, it’s critical to have the right information and support. That’s why we put together this guide on all things small business—from important definitions to expert growth tips and everything in between.
By our definition, a small business is any privately owned company that has fewer than 500 employees and makes less than $5 million in revenue in a given year. These companies can be structured as a variety of ways, from corporations to partnerships and even sole proprietorships. In most cases, meeting the Small Business Administration’s definition of a small business will open up funding and government contracting opportunities that wouldn’t be available otherwise.
One of the most significant benefits of being a small business is the opportunity to build closer relationships with customers. This personal touch is often a differentiator and can turn a customer into a brand advocate. In addition, smaller companies usually have lower overhead and can be more responsive to changing market conditions than larger enterprises.
Moreover, local small businesses are a source of tax revenue that is re-invested in the community to improve roads, fund schools and keep parks maintained. Many communities also benefit from an interconnected business-to-business sharing economy, where small businesses work together to reduce costs by renting equipment or supplies.