Is there really any such thing as small business? The term conjures up a wide range of imagery. The U.S. Small Business Ad-ministration (SBA) defines both a sole proprietorship and a firm with 499 employees—and everything in between—as being a small business. An individual selling quilt at a monthly flea market would seemingly have little in common with a 400-person software design firm. Obviously, lumping all small businesses like these together is ridiculous. In some ways, the SBA has admitted as much, in that its own definitions for what constitutes a small business run for 29 pages. (A 2004 effort to simplify the description continues.)
So here are the facts. You may think you don’t need to know this to grow your business, but I encourage you to stay with me. The U.S. Census Bureau 2002 report showed that there were 22 million small businesses operating in the United States. However, look at the numbers a little more closely, and you’ll quickly see that approximately 17 million of these businesses don’t have any employees. Some are simply shells set up by accountants and attorneys for tax purposes. Others are enterprises that can’t or don’t want to get any larger than they al-ready are. Despite not having any employees, you are probably a small business if:
· You sell candles, cleaning products, or cosmetics on a very part-time basis and make a few hundred dollars in profit per year.
· You lost your job in a corporation but got hired by the same company as an independent contractor.
· You are 70 years old and retired, but you do a little consulting on the side.
· You have a booth at local art festivals to sell your hand-made crafts.
· You buy things and “flip” them for a profit: cars, rental houses, collectibles, and so on.
· You live off the income from your investment activity.
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