A small business has a varied definition depending on the country where it is operated. In the United States, for example, it is defined as a company that is less than 100 employees, while in Australia, it is one that has less than 20 employees. For this reason, someone needs to be fully aware of how small business is actually on track with legal, legal and registration requirements.
Other criteria for classifying companies are in terms of annual sales, change or income. It is common knowledge that companies carrying several thousand dollars every year cannot be included in the same category as that produce millions of dollars every year. The value of assets, location and net income is also another factor that is usually considered when defining small companies.
Those who operate from houses are known as micro businesses. Small businesses have their own advantages and challenges. The advantage, the cost of starting is relatively lower than other businesses, the government, through his own agent, guarantees loans for these companies, so that no one is limited by finance. The independence for the owner is something that is very spaited by many people compared to being employed.
The problem and challenges, small companies are more susceptible to bankruptcy than other companies because they are under capitalization. Many of them tend to borrow more than they can handle, in anticipation they will develop and can care for the loan. Insurance costs and increasing energy costs are also a big setback.