Small business is a vital part of the economy. The government defines small businesses by revenue, employee count, and legal structure. And they come in a wide variety of shapes and sizes. Whether they’re retail shops or service providers, manufacturing companies or online stores, each small business brings something unique to the economy and creates jobs.
Small businesses can be structured in a number of ways, each with different tax and legal implications. The most common is a sole proprietorship, which allows one owner to sell goods and services under their own name without incorporating or filing a separate tax return. Another common structure is a partnership, which is two or more people who operate their small business jointly. Finally, a limited liability company, or LLC, is a corporate structure that offers some protection from personal assets from the business’s liabilities.
Many small businesses have an advantage over larger competitors: they can react faster to changes in the market or customer needs. They also have access to resources to help them grow, including loans and grants from banks and the Small Business Administration.
Despite these advantages, there are challenges facing small businesses. Some are still struggling to obtain credit, and others worry about the impact of the pandemic on their hiring and sales. But the good news is that most U.S. adults (86%) say that small businesses have a positive effect on the country’s economic health. That’s why we’re celebrating National Small Business Week this year.
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