Small businesses are the backbone of our country. They produce jobs, come up with new innovations, and help keep money in the local community. Without small businesses, our economy would suffer immensely. There is a misconception between the terms small-business owner and entrepreneur. Both can have small businesses, but they have different styles of leadership and thoughts on running their business. Entrepreneurs take much larger risks than business owners.
Small Scale Business Owner
The owner of a small-scale business organizes corporate processes and incurs the risks of running an operation based on the prospect of making a company profitable, like what the SBA (Small Business Association) states, an entrepreneur does. The SBA offers the same services to small-scale business owners who qualify for financing. In fact, by virtue of the agency’s name, its main focus is to assist small business owners in accomplishing their goals. However, because small business owners could be viewed as owner-operators, meaning they focus on sales rather than business development, they’re more apprehensive about functional steps versus strategic growth.
- About 50% of small businesses fail in the first four years, and about 25% of them in the first year.
- About 76% of small business proprietors report facing marketing challenges. The growth of online marketing has increased the availability of platforms small business owners have to navigate when advertising their companies.
- Private companies continue to be the lifeblood of every economy.
- For a business with less than 5,000 employees, the average employee base is 13 people.
- Small business owners are getting older. Around 51% of small business owners are over 50 years old, while only 16% are under 35.
- For employees, there are often very tangible benefits of moving to a larger industry. On average, employees at businesses with over 100 employees make 31% more than employees at sub-100 businesses.
- The convolution of financial accounts has changed the way we operate. More than 50% of small businesses now have a CFO or controller managing their accounts.
- In 2014, the IRS evaluated $2.1 billion in civil penalties against business income tax filers.
- Of the 1.09 million penalties assessed by the IRS, 47% were for delinquent payments, while less than 0.5% were for impreciseness.
- Only four out of every ten new entrepreneurs are women. This is a gap that has widened slightly since the mid-’90s despite the incentive of grants for women-owned businesses.
How Small Business Owners Differ from Others
- Small-business owners have a great idea: they resolve a problem in their community. They know their business and target spectators. They know what will make their clients happy: serving their customers.
- Small-business owners hold steady. They like to know what is coming next and where it is coming from. They make calculated decisions based on bookkeeping, where the outcome is clear. The result may not be huge, but it will usually keep them moving forward.
- Small business owners think about the things they need to finish this week. They have daily and weekly to-do lists. They manage workforces, work with customers, network with new customers, and keep everything rocking and rolling.
- Small-business owners are emotionally attached to their businesses. They are typically reluctant to sell or hand their business off to someone else unless it’s family. They like making the decisions and running the day-to-day decisions and tasks.
Final Note
To the business novice, being an entrepreneur or a small business owner is identical. However, these terms vary greatly. Sure, they are both self-employed and need to make money (regardless of how they spend it). Almost every country needs small-business owners to maintain a vibrant economy, and entrepreneurs are the ones who propel it forward.
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