Small business plays a vital role in the U.S. economy, creating jobs and driving innovation. But what exactly is a small business? While the definition of small business varies across industries, most businesses classified as small by the Small Business Administration (SBA) have fewer than 500 employees. The SBA’s size standards vary by industry and are further defined by the North American Industry Classification System (NAICS).
In addition, a small business is usually less bureaucratic than a larger company, giving its owners more autonomy and potentially allowing them to take advantage of a wider array of tax deductions. In addition, because small business owners are close to their customers, they can provide a level of personalized service that many large companies simply cannot match.
Entrepreneurs with a passion for their product or service, strong marketing, and an ability to adapt can build a successful business. The key is to select a business that aligns with your strengths and skills, and that you have the financial capability to support. You should also consider your legal structure. The most common types of small businesses are sole proprietorships, partnerships, and limited liability companies.
Spanx founder Sara Blakely started her business with $5,000 and a simple idea–cutting the feet off pantyhose to make Spanx panties that hold up better under tight clothing. She was able to pivot and innovate, staying customer-obsessed along the way, and now her company is worth billions. Entrepreneurs like Blakely, Daymond John of FUBU, and Sophia Amoruso of Nasty Gal can inspire you to start your own business.