5 Reasons It's Great to Be a Small Business

5 Reasons Why It’s Great to Be a Small Business

5 Reasons It's Great to Be a Small BusinessJust ask the owners of the more than 30 million small businesses in the U.S. While celebrating small businesses during National Small Business Week  it’s helpful for would-be entrepreneurs to know the benefits of being a small business and for existing small businesses to remember why they chose this life’s work.

1. The sky’s the limit

Entrepreneurs start their businesses with a dream. They want to create, help, support, provide, etc. through the products or services they offer. In return, they can achieve success. Each may define success differently—money, fame, innovation, supporting a family, creating jobs, building an empire—but there’s no limit to the opportunities that may abound. Every Fortune 500 company and multinational corporation started as a small business!

 2. Doing it your way

A small business can go for the gold in more ways than money. They can define how they want to operate. Examples:

  • Personalizing the customer experience. Due to size, the staff and owners in small businesses can continue to maintain close relationships with customers.
  • Greening the workplace. Small businesses can choose how eco-friendly they want to be.
  • Giving back to the community. It’s easy for small businesses to support their communities, through donations, volunteer activities, or participation in local charitable events.

 3. Flexibility

Small businesses can respond to changes more rapidly than large companies burdened with layers of decision makers. For example, if a new technology comes along and the cost is not prohibitive, a small business can embrace it immediately without lengthy analysis.

I remember when I started my print newsletter I had a conversation with a person who did an internal newsletter for a Fortune 500 company. Even with an editorial review, I could turn mine around in days; theirs took weeks because everything had to be reviewed by multiple parties.

4. Exemption from employment laws

You can be as generous and helpful to your staff as you want and your budget allows. But being small means you aren’t subject to penalties for not providing certain benefits to employees. For example, you don’t have to offer unpaid time off under the Family and Medical Leave Act unless you have at least 50 employees (there may be state law requirements for smaller employers); of course you can choose to do so. You won’t be penalized under the Americans with Disabilities Act for failing to make accommodations for a disabled employee if you have fewer than 15 employees, although you likely would want to do so if it could be done with reasonable expense.

5. Special tax breaks

There are a number of deductions, credits, and other breaks in the Tax Code restricted to small businesses. Size for these rules may be defined by the number of employees, the amount of revenue, or the amount of assets. For example, tax credits restricted to “small” businesses include:

  • Disabled access credit
  • Credit for small employer pension plan startup costs
  • Credit for differential wage payments
  • Credit for small employer health insurance premiums
  • Research credit used as an offset to the employer share of Social Security taxes

Conclusion

Despite the growth of multinational corporations, small businesses continue to define their role in the marketplace and grow in numbers. The 2016 Kauffman Index of Startup Activity reported “A heartening increase in the level of startup activity in the United States,  despite the numerous headwinds entrepreneurs face.” Why? Because there are lots of reasons it’s great to be a small business.

11 comments

  1. Jill Brennan 5 May, 2017 at 20:35 Reply

    Hi Barbara, thanks for this article. I agree and its funny that as I was reading I kept thinking of all the ‘yeah, buts..’ or the downsides of running your own business, often things that are the flipside of what you’ve listed above. But if I think about what other benefits there are, the other one I would add to your list is the amazing feeling of creating something tangible out of an idea, something that others decide they need and are prepared to pay for. That is a very gratifying feeling (knowing you’ve spotted an opportunity, nurtured it to life and that it helps people do or achieve something they want).

  2. CallHippo 10 May, 2017 at 06:51 Reply

    Hello Barbara,

    All the five points which you had covered in this article is really awesome.
    Totally agree with your point “Special tax breaks”.
    Most benefit of small business is “Due to size, the staff and owners in small businesses can continue to maintain close relationships with customers”.

  3. Gregg B. 16 May, 2017 at 23:23 Reply

    Barbara, great points as usual. The only addition I’d make would be a 1b that reads, “…but you don’t have to reach for that sky!”

    One of the best aspects of being small is that for those of us who are bootstrapped there’s not group of investors looking over your shoulder expecting a return. To your point about flexibility, there’s a significant amount of freedom that opens up for both SMB owners and employees when you can grow but nobody is demanding you do.

    The best years of my career were spent at such a company and that flexibility let us maintain our focus on the small vertical where we start to the point that our product, team, and services would regularly beat companies 100x our size.

  4. Eugene Davis 20 August, 2017 at 19:28 Reply

    I think small business is great, but I find many issues with keeping up with overhead and expenses. Any suggestions??

    • Barbara Weltman 22 August, 2017 at 17:21 Reply

      Thanks for your comment and question, Eugene. I suggest following my blog; I regularly address critical and constructive tips and information for helping small businesses.

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