Small business benefits to the economy and steps necessary to start a small business
Small businesses benefit both the economy, by creating new jobs and industries, and consumers, by providing innovative specialized goods and services to fill specialized market niches. Over 90 percent of businesses are considered small businesses, which create vast new industries, encourage entrepreneurship, and revitalize economically depressed areas by creating many new jobs in the local area. The individuals owning and operating a small business can benefit greatly as well, through careful planning and proper management. Small businesses create the largest portion of new jobs in the country. ... 7% of all employers are small businesses. ... html) Members of the workforce that have a lower chance of finding a job, such as women, minorities, and welfare recipients, find employment easier in small businesses. Low-income areas can attract small businesses due to the lower cost of operation, and can grow economically as a result of the new jobs, improving the quality of life of the area. Together, these uplifted areas contribute to the national economy. Small businesses generate 47 percent of the nations sales and over half of the GDP. The three ways that a small business can form are sole proprietorships, partnerships, and corporations. Most small businesses are sole proprietorships. The individual owner gains unlimited control and flexibility over the business, as well as all the profits, but also gains unlimited financial liability and financing limitations. Sole proprietorships are most commonly small or temporary businesses, due to the limited finances and ease of formation and dissolution. ... Another type of small business organization is the partnership. ... Interpersonal conflicts, therefore, can cripple the business easily if the members cannot cooperate and reach agreements on important business decisions. Many enterpreneurs enjoy the freedom of complete control more than the greater potential for profits and ease of startup, making this a less popular form of small business. ... The investors are stockholders, each owning a small share of the company. ... No matter how a business is organized, there are several key steps to ensuring a successful start up as well as ensuring financial stability during the first few months of operation.