Small business is the backbone of the economy. Whether they sell bikes,
coffee, computers or ideas, small businesses provide valuable services and
create many new jobs.
Businesses with fewer than 200 employees are considered to be small businesses.
This includes home-based businesses, restaurants, retail stores, franchise
outlets -- any business that offers a product or service.
Owning and operating a small business takes lots of work and dedication.
In many cases, the small business owner is in charge of running the business
as well as doing the books, the ordering, the advertising and anything else
Success isn't guaranteed in small business. It's a fact people have to
accept if they're going to start up their own business. Relatively few small
businesses survive their third year.
"There are no guaranteed paychecks in small business -- no work, no eat,"
says Walter Daniels, a small business owner in Indianapolis.
Despite the hard work involved, operating a small business doesn't have
to be physically demanding.
"After a serious car accident, I had to regroup and find another way to
work. So I started a home business," says Daniels.
Owning your own business can make for some pretty long days, especially
in the beginning.
"I can remember more than a few 14-hour days in the beginning. I was like
the walking dead," says Marlene Cox, another small business owner.
Owning a small business has a downside. Unlike salaried employees, entrepreneurs
never know how much money they will earn each month. Some new entrepreneurs
"burn the candle at both ends," working many hours for little income.
"When it's your business, it is often hard to stop and take time to relax
and recharge the batteries. There is always something that needs to be done
and [the] likelihood is you're the only one around to do it. There is rarely
a regular paycheck at the end of each month. I have been self-employed most
of my adult life, and [I] envy people who are content to be an employee,"
says small business owner Sarah Moore.
The daily duties of small business owners are as varied as the many kinds
of businesses they run. But most agree that it takes more than a great idea
and hard work to make a small business work. You need a good understanding
of financial principles.
Some business ideas are more risky than others. For example, home-based
businesses are more likely to succeed because the overhead and start-up costs
are low. Restaurants and retail stores are costly to start up and are more
likely to fail.
What you earn depends on the type of business you own and, of course, the
success of that business. While some home-based businesses may earn less than
$10,000 per year, there are small companies that earn millions every year.
Experts predict small business will continue to be a big force in the economy,
with service industry ventures experiencing the most growth.