Small businesses are usually owned by single entrepreneurs or a partnership. They are common enterprises and most of them are privately owned and run. They usually employ fewer task forces as compared to larger business organizations or corporations. Due to their size, small businesses are usually easier to manage. Below are some great advantages of setting up a small business.
Easy start up
Starting a business is no mean feat; whether small or large scale. However,if the two are compared, a smaller business can be said to be easier to start. This is in terms of the amount of capital invested, legal formalities required such as permits et cetera. They would not require as much startup capital as larger businesses. Few legal formalities are needed for smaller businesses. Policies concerning laws such as taxation are not as long as those that larger businesses have to contend with. Besides, since most small businesses are privately owned, a sole proprietor can count on family support when it comes to running the business.
Innovation and Creativity
An entrepreneur does not have to answer to any other person but themselves. This freedom to run one’s business does not limit their creativity. They can come up with ideas and enforce them. Most ideas are actually good inventions that propel the business forward.
Own Boss, Independence
A small business that is privately owned enjoys independence from outsiders. The owner(s) are their own bosses. They make rules, decisions and determine how the business will be run. They enjoy the independence because they do not have a higher authority to answer to but themselves. A great advantage of this is that an owner can steer their business in whichever direction that pleases them.
Source of Income
Like all other businesses, a sole proprietor or people in a partnership start up a business to create a source of income and make profit. Small businesses make a profit as well, and owners are able to sustain themselves.
Low Overheads
The cost of running a small business is lower as compared to that of running a bigger business. They have fewer expenses to incur. Wages are paid to fewer employees, rent is paid for smaller premises, and bills are not as high, and even taxation is proportional to the production size. The small scale of production means lower overheads, thus the business can offer favorable prices to consumers.
Creation of Employment
A small business that has a work force, no matter how small it is, it has essentially created an employment opportunity for another person. By employing other people, small business owners help promote the development by creating job opportunities for the unemployed. Even though they may not employ many people, the few that they do ensures that one more household has a steady source of income.
Serve a Niche Market
Due to their size and scale of operation, small businesses often serve a narrower market, a niche market. Owners are able to establish strong customer relationships and give more personal services as they deal directly to their customers. This form strong customer relationships and loyalty and the business is likely to keep its customers.
Potential to Grow
A small business has potential to grow and expand and have more branches or increase its scale of operation. Their size makes them the potential giant fishes of the business world. With dedicated planning, a small business can be transformed into a bigger one over time. The owner(s) have the choice of expanding the business and attracting other investor if they so wish.
Specialization
A business person with an idea of starting a small business is likely to venture into a field that they are well versed in, or are experts in. For instance, a person wishing to start a bakery will most likely be a baker themselves or they have special knowledge in the baking industry. This is a great thing because of their knowledge; they are able to give the best services to their clients. A single person with years of experience will most definitely deliver better services than a group of employed people with less experience.
Flexibility
A small business is more flexible and can give speedy assistance to customer complaints. The process of decision making does not require extensive discussions and agreements. The owner can make a decision faster, without consulting superiors because it is his or her business. This ensures that problems are tackled effectively as they arise and customer complaints are addressed faster.
Mark Stevens, Creative Director at Logaster. I take photos, design and sometimes write about classical and jazz music. Currently, I am finishing to write a research about innovations in business development. In spare time, I enjoy playing saxophone and do my best to be high minded and souled.