Small Business; is corporation partnership and sole proprietorship that has low number of

employees and typically has low revenue than the larger businesses

Characteristics of a small Business

 Labor intensive(cheap labor)

 Limited investment
 Less number of employees
 Low profitable and revenue
 Local Area of Operation(small market area)
 Management

Kinds of small Businesses

A. A partnership- is a kind of small business that that ruined and operated by two or more
people, who share profit, lose, tax, etc.

Advantage of partnership

i. Startup cost are low

ii. Easy to operate
iii. Sharing profit, loss, tax etc
iv. A business partnership help Simplification of work in a business
v. New different ideas
vi. Cost savings

Disadvantage of partnership

i. Low profitable and revenue

ii. Less number of employee
iii. Conflicts/ misunderstanding
iv. Decision making its complicated

B. A sole proprietorship- This is a kind of small business that owned and ruined by
one(single)person

Advantage of Sole proprietorship

i. You are the boss

ii. Startup cost are low
iii. Easy to make decision
iv. Few government rules and laws(regulations)
v. Cheap labor
Disadvantage of Sole proprietorship

i. Local Area of Operation

ii. Less number of employee’s
iii. Taxed as a single person
iv. It is difficult to get holiday
v. Low profit and revenue

Source of Business ideas

 Hobby
 Experience
 Mass media
 Survey
 Brainstorming
 Exhibition
 Complains

Steps of a Business planning

 Conduct market research

 Write your business plan
 Fund your business
 Pick your business location
 Choose your business structure
 Register your business
 Get federal and state Tax IDs

BUSINESS PLAN

Business plan; is an essential written document that provides description and overview of your
company’s future. Such as Business Goals, industry standing, Area of Operation and so on.

Importance of a business plan to an Entrepreneur

To set better objectives and benchmarks

To communicate objectives and benchmark
To iron out the kinks
T o better understanding broader and business landscape
To secure financing
To avoid big mistakes
To provide guides for business provider
 BUSINESS GROWTH

Refer to the increase in business level or capacity in terms of Revenue, market share and
profitability

Indicators of business growth

 -Sales revenue
 -market share

TYPES OF BUSINESS GROWTH

a) Qualitative
Customer satisfaction
Good business reputation
Good customer reviews
Customer loyalty
b) Quantitative
Rapid sales growth
Gross profit growth rate
Inventory level
Improving cash flow
Operational performance and profitability
Ancient efficient rate

LIMITATION OF BUSINESS GROWTH

Competitions
Inability to pay back loans
Poor marketing
Un-clear business strategy
Failure to adupt changes in the market