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A small business is known to be a business that is privately owned enterprise operated by a small amount of employees and could be said that it produces a reasonably low number of sales. A small business is usually owned in a form of sole proprietorships, partnerships or even corporations. The size of a small business varies from country to country and also the industries it is operating, ranging from fewer than 15 employees to 50 employees in the European Union and up to 500 employees in the US. Small business can also be identified by looking at the businesses assets, sales and net profits as well.
In various countries small businesses are common as per the economy. The types of sectors small businesses operate are involved in industries such as hairdressers, online businesses, law firms, accountants, convenient stores, delicatessen and so on.
In order for small businesses to start up, business owners need to acquire some sort of capital, initially a small business can be funded in many different ways such as the following self financing, grants, loans from banks, friends, relatives, personal savings and partnership of the business.
There are numerous of advantages of operating a small business, an advantage of starting a small enterprise is that it can be set up at a low cost and also be operated in part time hours. Some small businesses focus on specialization providing using different types of niches and the use of the internet marketing. Small businesses are known to be more close to their customers and cliental resulting to better accountability and maturity.
It is known that small businesses find it a big challenge in seeking new customers as this adds much more effort and time in order to create business every day by using the marketing aspect at all times to maintain the growth in sales. In order for small businesses to work they tend to use many marketing methods and strategies such as word of mouth, different types of directories, referrals, television advertising, radio advertising, outside billboards, telemarketing, email marketing, use of database and so on. Furthermore many businesses tend to create websites in order to do business as this type of advertising and marketing strategy is rather affordable and is also easy to create as there are many programmes that are easy to use and available at a low cost. Using a website for a business is known to be one of the leading tool to attract customers and is known to be a rather significant way to contact with the market as the internet can be accessed at anywhere in the world at all times in this modern days.
These days social media such as Twitter, Facebook, My Space, are used in small businesses in order to benefit from awareness to the business and to interact with their loyal consumers letting them know of news on any special offers, new products or services as this is believed to generate continuous business with the companies cliental and give the opportunity to communicate freely with each other as well using the method is extremely cost effective, on the other hand another method small businesses use in these modern days in the social networking sites are the blogs as this is rather effective in the sense of solving technical; issues and interacting in a quicker and again a cost effective way.
In Small enterprises the strategy of public relations is commonly used for press releases, stories, events, sponsorships and more in this kind of nature as well this method being used is also extremely cost effective and generates great loyalty with customers.
Taking a look in to Niche markets the definition is rather simple as it is basically a business operating in specialising on certain products and services for example a store selling clothes to targeting any segment of consumers, where as a niche business will decide to only specialise in clothes that are made for big sizes and this will be known as niche. The rapid growth of small businesses starting up especially in this downturn economy crisis is believed to be niche market as this is a great market to be in and is encouraging business owners to take an opportunity in creating a business. Specialising in certain products or services can be extremely benefiting and for sure profitable as this type of business and strategy tends to focus on offering to small groups of customers or a certain segment of people, this is believed to be a great way to success when dealing with consumers preferences that has never been met previously by another enterprise, however business owners getting in to the niche market will need to know and research a lot in regards to what they believe is a high target market as in what are the demands of the consumers and making sure that the customerâ€™s needs are met with the products and services offered.
Franchise business are a good way for small enterprises to profit especially in the different levels of the economies, examples of franchises such as McDonalds fast food chain of restaurants, Dunkin Do nuts, Starbucks coffee shops, Bata shoe stores etc... However small businesses been around for a reasonable amount of time tend to think about further expansion as opening new branches or chains as this will be beneficial for the businesses to franchise nationally or even go international depending on manpower, capital, profits this will also create bigger awareness to the fame of the company being franchised.
Tax returns is a major factor in small business as this is known to be aspects of expenses spent in the company and is eligible to have the tax return on this sort of nature for example company cars, travel expenses, transport costs, petrol, mobile phone recharge cards and so on as this all for the use of the company expenses and will be all returned due to tax rebates.
The concept of depreciation is defined to be assets for a business such as car, machinery or anything in this sort, however it will never keep its value for example once a brand new car is taking out the showroom then there has been a drop in the value of the asset of the business and this is acknowledged as depreciation. Taking depreciation in to consideration can be beneficial for the owners of the businesses that are running and a understanding of this is rather crucial, whereas every business whether large or small face depreciation as this is usually recognised each year of the situation of profit and loss and can give an indication for business owners to figure out what assets are worth it and what is not for example a small business may need to purchase a van in order to operate its company activities and this asset been purchased will last no more than 2 years due to the quality and possibly due to high maintenance, high consumption of petrol, however this will impact of the businesses profit and loss so logically thinking business owners are keen on finding assets to operate the business at lowest cost as possible and keeping such asset for as long as possible due to depreciation, furthermore with respect not acknowledging the nature of depreciation is rather risky as this can effect businesses profits and incur huge losses sending businesses to collapsing.
Subsidy is a significant factor towards a business as it is defined to be a type of financial support that paid to a business or even the economic sectors. The subsidies are usually offered or granted by the government in order to avoid decline in certain types of industries such as distributors or producers, an example of this can be said of the situation going on in India where the costs to produce diesel is rather high and actually half the price more than to produce petrol, however the government of India subsidises the diesel fuel by paying half the price as the public transport in India all are run on diesel fuel so this subsidy tends to encourage it. However relating this to small businesses it is known that some businesses are subsidised in the sense of the financial aid from the government such as grants this will be cost effective, however subsidy can be also granted by non governments but rewarded by individuals also.
As mentioned above in regards to many ways of generating small business funding private equity funds is the key to a funding a business even though other ways of generating funds private equity funds is rather beneficial as this is organised for a small business in a limited partnership or limited liability company, however this managed by private equity firms and tends to operate as a general partner in the business. The finance supported tend to get hold of capital commitments from confident experienced investors for instance financial organisations, pension funds and rich individuals to invest a certain amount. These investors turn into passive limited partners in the financial partnership and sometimes acting as the general partner identifying a suitable investment opportunity. The general partner usually decides on investments which also run the fund's investments. In addition to private equity firms it is believed that there is a process for companies to earn this type of funding for their small business as they have to meet certain criteriaâ€™s the growth of business, business income and so forth.
In conclusion various factors and aspects of the rapid growth in the small business sector has been analysed and examples to this has been included, what has been mentioned were the factors that are involved in small business and how this benefits the rapid growth of a business, from definitions to findings to examples. Types of sectors, sources of funding, tax rebates, depreciation, subsidisers, franchises, niches, advantages of marketing, economy and private equity funds. All these points have been pointed out relating to the rapid growth of small business and how the organisations actually benefit and still use and follow currently in order to pursuit sales and create business of supplying products and services to consumers.