According to the Small Business Administration, there are 30.2 million small businesses in the United States. These range from mom-and-pop shops to global corporations. They are a driving force in innovation, job creation and economic resilience.
They are a vital part of the economy and can be a driver of social change. Some start from a passion and others form around a family legacy. They often have unique product offerings that cater to a particular niche market. Many have deep ties to their local communities and can provide a much-needed service. Others have a strong entrepreneurial spirit and are always looking to scale their operations or be the next big thing. Think of Walt Disney and his animation studio, Richard Branson and his global empire built from one record store, or Sara Blakely and her Spanx underwear conglomerate that started in a garage.
Choosing the right legal structure is crucial for many small businesses. The decision can affect the tax treatment, liability, and ability to grow. For example, a sole proprietorship allows you to sell products or services under your own name without incorporating and is the most common form for new business owners. However, a corporation offers more protections and can open up more opportunities for government contracting.
One of the key keys to small business success is constantly improving and focusing on what’s important. When a business gets too comfortable or becomes blind to the need for change, it can quickly fall behind in the marketplace. Even giants such as Blockbuster Video and Kodak that had enormous cash liquidity suffered from failing to adapt to changing consumer demands.