Small businesses are integral to the American economy, acting as a source of innovation, prosperity, and growth. They are either service or retail operations such as grocery stores, medical stores, tradespeople, bakeries, and small manufacturing units. Small businesses are independently owned organizations that require less capital, less workforce, and less or no machinery.
Most Popular Business Types
Sole Proprietorship
Did you know over 99.9% of businesses in the US are small businesses? Sole proprietorship gives the owner full freedom and flexibility. It has basic accounting and is the easiest to run as it entails the least regulations.
Partnerships
Partnerships are run by two or more individuals who are liable for the financial and legal aspects of their business operations.
Incorporated Companies
Incorporated companies are registered with a state to become separate legal entities, independent from their owners and shareholders.
Suppliers
Suppliers are an important but less documented type of small businesses that are part of commercial and government supply chains.
Independent Contractors and Virtual Businesses
If you are planning to start a small business, it is crucial to understand the different types to find what fits your circumstances best. Policymakers sometimes focus solely on growth firms, which is a mistake. The smallest businesses are run entirely by individuals or small teams. Consider taking classes on the type you would like to do to be successful.
Choosing Your Business Structure
When deciding, consider factors like industry, capital, risk tolerance, and goals. No two businesses are ever alike. Consider control, involvement, potential for growth, and your exit strategy.
Note: Some repetitive or similar sentences have been removed to avoid redundancy.