Introduction: An owner with independence, experience takes a decision and controls his own, invests his own money, and operated a business. It says small business. This business characters’ equity is not publicly traded and its revenues of less than $7.5 million and 500 fewer workers. In the United States or Canada say small business as a company by federal securities law. Small Business tax policy different rate depending on a different country and different industry.
Small Business: Small business definition of various Countries of various types. In the Australian Fair work Act under small business workforce ranges is fifteen employees but the European Union small business workforce ranges is fifty employees annual turnover is less than Euro 10 million and a small quantity US small business workforce range is less than five hundred employees. But the actual small business definition in the United States industry-by-industry basis different and different. Manufacturing business employees ranges less than 500 and yearly turnover is less than $7.5 million. United States Healthcare small business definition is 1 to 50 employees. Manufacturing and service business in India not more than annual turnover is Rs 50 crore and not more than investment RS 10 crore.
Activity: Small businesses in different countries are different activities. Such as convenience stores, restaurants, small grocery stores, guesthouses, bakeries, photographers, computer programming, web design, daycares, lawyers, dentists, retirement homes, etc. we can say on this field related business is a small business. Others wise Profitable Small business is Tax Preparer, Translator, Video production, Travel Planning, Telemarketing, Technology Consulting and Repair Marketing Services, Personal Trainer, Have Van, Will Help, Gardening and Grass Cutting, Snow Clearing, Real Estate Brokerage, Mobile Hair Cutting, Social Media Consultant, Online Surveys, Business Consulting: Courier Services, Cleaning Services, Personal Chef, Tutoring, both Online and In-person, Logo and Design Services, Property Management,
Types of common business structures : Corporations, partnerships, or sole proprietorship types are in maximum small business owned.
Sole proprietorship: This business structure is low-risk. Most of the people are doing this structure business because its systems are easy. This business control by the owner. This business is fully responsible for the owner. A sole proprietorship has one trade name. This business owner’s assets and liability are not separate from business assets and liability. This structures business is hard to condition from collecting money for operation business. Because Bank is not interest for invest in a Sole proprietorship business and this business cannot sell the stock.
Partnership: Two kinds of common partnerships in the world. One is limited partnerships (LP) and another’s is limited liability partnerships (LLP). This business is simple structure and two and more people are doing this business. Only one main partner and has more liability and other partners have small liability. It calls limited partnerships business. It is a partnership agreement by the document. On the other hand, limited liability partnerships liability all owners are the same. One owner is not responsible for their own work to another’s owners.
C corp: Many times a corporation called a C corp. It is one kind of business structure for separate owners by a legal entity. It is a highly costing business because it will be take reporting, operation, record-keeping. This business can raise funds by sell company stock sell. This system pays Double tax, Firstly corporate and second is shareholder pay personal tax.
S corp: Sometimes S corporation called an s S Corp. This business member must be us citizen and have not more than 100 shareholders. It characters in this business profit or some loss go to owners personal income. It is avoided to pay double tax like C Corp.
B corp : Many times benefit corporation called a B corp. Majority of US States
This business is running and it is a profitable business. It is different ofc corp for accountability and transparency. In the united state, some states submit annual reports by B corp for benefit peoples.
Close corporation: This business structure is less traditional corporate and similar is B Corps. Some B Corps company operates small groups of shareholders. It shares not sell as like share market.
Nonprofit corporation: This business structure is not profitable. It is fully tax-free for his business. Because mostly this business most of the profit money is used for charity, education, religion, health, food, etc. This business follows the C Corps rules.
Tax rate: Various small business taxes rate is various in the United States. The average tax rate is 19.8 % in us. But one owner’s tax rate is 13.3 % and one or more owners’ tax rate is on average 23.6%. In Canada, the small business tax rate is 9%. In UK standard tax rate is 20%.
Employment rate : In United States 31.7 million got jobs by small business in 2020. In Canada 8.3 million got jobs by small business.
Advantage: 1.) Quick response: Business comes with different types of customers. They demand many things for their own need but they get not as like demand ware. When customers are complaining about their demand, in this time small business quickly receives complaints and solve the problem for their business. But big businesses are late to listen to the complaints and solve them late. It is a big advantage for small businesses.
2.) Lower cost: Generally small business make by small place, a small amount, small people. For this here everything costing is cheap than big businesses. Peoples get everything from a small business at a cheap rate.
3.) Quick change market condition: Small business owners can know market conditions very easily and take action for business development.
4.) Good relation: Small businesses can make good relations with the public. Anybody can easily meet the small business owner and easily discuss everything.
5.) Nimble and flexible: For Policies and procedures are more flexible in small businesses. Small businesses are less bound. For easily policy customers are got every service from small business.
6.) Small can will be big: Many small businesses go too big in the united states. Many small business owners are mega-millionaire for theirs good policy. Such as Mark Zuckerberg, Jeff Bezos, Elon Musk. Present America every big business past time had a small business.
7.) Independence: Small business owners can take decisions for anything. Most of the owners in small businesses are signal people. These people for business development with easily can take own freedom decision.
- Risk: Small business is a big problem, it is a risky business. Because of this business full liability to the owner. Most of the small business owner is signal and he controls everything. Such as sell, Money planning, purchase, customer satisfaction, etc. Small businesses for operation by owners use money and this money he arranges by owns or loan. This loan fully liable to the owner. This business depends on one person and if he does anything wrong so fully business will be closed.
- Uncertainty: Small business starting time running was good but for the economic downturn changed the customer’s demand and competitor give many advantages for the customer. For this result, business increasing rate stop and it goes to uncertainty.
- Financial commitment: Small businesses need money for operating the business. Most small businesses are a source of funding is retirement, investment, or personal investment. Many times many peoples are collecting money from home. Many times small business owners for funding get loans from banks or financial institutes against his home. If small business owners lost business so the bank or financial institute capture the home.
- Talent gap: Small businesses can not bear high leave employees in high salary because the small business fund is limited. So small businesses cannot keep in Talent peoples.
- Fund collection: Small business is a big problem, they cannot sell in small business share in share market. So small business owners can not be thinking big for funds.
Conclusion: In Japan, most of the people are employed by small businesses. Fully Japan by depending on small business for strong Economics. Most of the Japanese peoples are doing jobs in small businesses or small enterprises. Not only Japan every rich countries such as American, UK, francs, Australia, but Canada are also economics are dependent on small business. By this business, the government gets more tax, vat, and peoples get jobs with easily. This business small fund needs. So anybody can do small business. By small business, every people of society get money and come to flow of money in economics. For this demand create in many items. For this fill up the demand many companies will make and many peoples get jobs.