A small business is a for-profit company that usually has fewer employees and generates less revenue than larger businesses. Small businesses can be structured in many ways for tax and legal purposes, from sole proprietorship to LLCs or corporations. Registering as a small business can open up opportunities for funding and government programs.
Using their passion and creativity, small business owners can create success stories like Daymond John, founder of FUBU, who turned his mother’s basement into a clothing factory. Sophia Amoruso, meanwhile, used her social media following to turn her eBay vintage apparel store into a $100 million fashion empire, and later rebranded herself as a mentor for entrepreneurs.
In addition, small businesses are in closer touch with their customers and clients, as they typically see them on a regular basis. This helps build loyalty and can make it easier to market a product or service.
Despite these advantages, small businesses face many challenges. Some of the most significant include access to capital and limited resources. The lack of capital can limit the ability to grow and modernize a business, while limited resources can hinder the ability to reach new markets. In addition, many small businesses are more vulnerable to economic fluctuations than large companies. For example, during a recession, a smaller business might experience a dramatic drop in sales and may not have enough reserves to cover expenses for long periods of time. However, savvy marketing and persistence can help small businesses overcome these obstacles.