Small Business Concepts

A small business is a business with a small size, with less than 500 employees in the United States.
The definition of a small business varies by country, for example, in Spain, it is a business with 50 or less employees.
Two-thirds of small businesses have 20 or less employees.

Small businesses create most new jobs in the United States, with 66.3% of new jobs created by small businesses.
Most people in the United States are employed by companies with 500 people or less.

Entrepreneurs are risk takers who are willing to put their time, effort, and resources at risk to start a new business.
Successful entrepreneurs are persistent, resourceful, and willing to take calculated risks.

Independence: entrepreneurs get to be their own boss.
Flexibility: entrepreneurs get to work on what they want, when they want.
Focus: entrepreneurs have a clear goal and can focus on making it a success.
Building a reputation: entrepreneurs can build a reputation for themselves and their business.

High stress levels: entrepreneurs often work long hours and face significant challenges.
High failure rate: most new businesses fail, with a failure rate of over 90%.
Underfunding: many small businesses lack the resources needed to get off the ground.

Lack of resources: many entrepreneurs underestimate the resources needed to start a business.
Poor marketing: failing to understand the competition and customers.
Lack of a business plan: not having a clear plan for the business.

Need a plan: a set of actions to achieve a set of goals.
Decide on a business organization: sole proprietorship, partnership, or corporation.
Secure funding: personal assets, venture capitalists, or debt financing.

Venture capitalists: invest in businesses with high growth potential.
Debt financing: loans from banks or other lenders, often requiring collateral.
Line of credit: a pre-approved amount of revolving credit for business operations.
Bartering: exchanging goods or services instead of cash.### Starting a New Business
Two main ways to start a new business: starting from scratch or buying a franchise
Starting from scratch means beginning with no customers, brand, or market, and having complete control over decision-making
Starting from scratch has a huge advantage in allowing complete control, but also a huge disadvantage in having no existing brand recognition or market knowledge

A franchise allows an individual to tap into an existing brand, using assets such as brand recognition, training, and resource access
Typical example of a franchise is McDonald's, where franchisees own and operate restaurants using the McDonald's brand and resources
The franchisor provides training, access to suppliers, and quality standards, and the franchisee benefits from the brand's advertising efforts
Financial assistance may also be provided to franchisees

Advantages:
- Access to existing brand recognition
- Access to training and resource access
- Standardized quality control systems
- Benefits from brand advertising
- Financial assistance
Disadvantages:
- Need to pay fees for running the business
- Must follow strict standards and guidelines
- Limited strategic flexibility
- Possibility of market saturation

Large businesses may try to internalize small business models to innovate and stay competitive
This can be done by creating small businesses within the larger organization, allowing for flexibility and innovation
Examples include Apple's development of the iPod and iPhone, which were created by separate teams within the organization

A small business in the United States has fewer than 500 employees.
The definition of a small business varies by country, with Spain defining it as 50 or fewer employees.

Small businesses create most new jobs in the United States, with 66.3% of new jobs created by small businesses.
Most people in the United States are employed by companies with 500 people or less.

Entrepreneurs are risk-takers willing to put their time, effort, and resources at risk to start a new business.
Successful entrepreneurs are persistent, resourceful, and willing to take calculated risks.

Independence: entrepreneurs get to be their own boss.
Flexibility: entrepreneurs get to work on what they want, when they want.
Focus: entrepreneurs have a clear goal and can focus on making it a success.
Building a reputation: entrepreneurs can build a reputation for themselves and their business.

High stress levels: entrepreneurs often work long hours and face significant challenges.
High failure rate: most new businesses fail, with a failure rate of over 90%.
Underfunding: many small businesses lack the resources needed to get off the ground.

Lack of resources: many entrepreneurs underestimate the resources needed to start a business.
Poor marketing: failing to understand the competition and customers.
Lack of a business plan: not having a clear plan for the business.

Need a plan: a set of actions to achieve a set of goals.
Decide on a business organization: sole proprietorship, partnership, or corporation.
Secure funding: personal assets, venture capitalists, or debt financing.

Venture capitalists: invest in businesses with high growth potential.
Debt financing: loans from banks or other lenders, often requiring collateral.
Line of credit: a pre-approved amount of revolving credit for business operations.
Bartering: exchanging goods or services instead of cash.

Two main ways to start a new business: starting from scratch or buying a franchise.
Starting from scratch allows for complete control but lacks brand recognition and market knowledge.
Starting a franchise allows access to an existing brand and resources.

A franchise allows an individual to tap into an existing brand, using assets such as brand recognition, training, and resource access.
Examples include McDonald's, where franchisees own and operate restaurants using the McDonald's brand and resources.

Advantages:
- Access to existing brand recognition
- Access to training and resource access
- Standardized quality control systems
- Benefits from brand advertising
- Financial assistance
Disadvantages:
- Need to pay fees for running the business
- Must follow strict standards and guidelines
- Limited strategic flexibility
- Possibility of market saturation