Every big business started in a small business since entrepreneurship is revealed in the form of a small venture. It is the first approach wherein an entrepreneur performs his/her creative ideas. Small business has played a major role historically in civilization. It emerge more than 400 years ago. Small businesses grow in almost all ancient cultures of the world. Thus, small business is important for the evolution of entrepreneurship in every economy.
The small business definition differs from country to country. And between times in a similar country. There is no normally accepted concept of small business. Small business operates in a localized area, it is an enterprise that is small in size. Except for its marketing, with only fewer employees. It is financed by a small group of individuals or one individual imp source.
Small Businesses characteristics:
Different countries have approved various definitions of small business or industry. Experts have identified below the following common characteristics of small businesses.
- The business is operated by the owner or owners of the firm. The business management team might compose of family members, close friends, and relatives.
- The decision-making normally lies in the responsibility of one executive. With no delegation or very little authority. Small-business managers-owners maintain a high degree of focus of authority.
- It appears to be a close employee-management relationship. Entrepreneurs get hold of an active part in the operation and management of the firm. They grow a very constant relationship with the employees. Thus, relationships are usually friendly and informal.
- Small business is also considered as an extension of the personality of the entrepreneur. It is the reflection of the desires and dreams of the entrepreneur.
- Normally, there are lesser functional specialists. Like a personnel manager or a full-time accountant in the organization. The nature of work is not that complicated. Yet, if the work is complex, it is the owner who is in charge of the task. Thus, they can develop a semi-skilled person for their ventures. Any other functional tasks are executed by the owner-managers. With their framing or learned knowledge in a specific field.
- Usually, the firm is not greater than 2 tiers of management reporting. Also, the size of employment is limited by the law of a certain country. It doesn’t exceed about 1,500 persons.
- The firm frequently places little highlights on long-term planning. The management of the firm is self-determined. Small businesses may take partnership, proprietorship, or private limited company.
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