Characteristics of a small business Essay Example | Topics and Well Written Essays - 500 words

Characteristics of a small business - Essay Example The first thing that is necessary for a small business is with respect to its ownership. A small business should be a sole proprietorship rather than a subsidiary or a branch. Within USA, the number of employees within a small business should range 500 to 1500 within a manufacturing firm; contrastingly within Europe, this range is limited to 50 employees to consider a business as small. Considering the revenue characteristic, the amount of revenue being generated annually should range from $5 million to $21 million (considering the business is within US and persists to retailing). If the nature of the business relates to a service industry, the annual receipts should range between $2.5 million to $21.5 million. General and Heavy construction businesses should generate annual revenue between $13.5 million to $17 million in order to be attributed as a small business. With respect to the industry and the businesses’ dominance, a business should not be operating within such an ind ustry where it is the only buyer or the lone seller. This would lead to the business being classified as a monopoly and hence the business may not be considered as a small business. Besides that, the legal environment within a country usually restrains a company from operating as a monopoly. This is a certain legal restriction imposed by the government of a country to serve the greater good of the public in order to ensure that businesses do not charge a high price. There is a strong belief within the US that small businesses help in generating the highest level of jobs. As small businesses are usually sole-proprietorship, its work life balance helps in reducing racial differences and it also helps in empowering the women of the country via increased self-employment. Small businesses help in stimulating the country economy. This stimulation is made possible by the creation of employment, hence eradicating