Small Business Definition – Learn From Scholars: Small business is an integral part of the total business scene in any country. Though small in size such business activities cover almost any area of -business VIZ. manufacturing. wholesaling. retailing. service and the like. It is now well recognized that small businesses are the largest employers with lower investment per job. That apart, the growth & development of medium & large industries is mostly dependent on the small business.
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Small Business Definition – Learn From Scholars
Small business occupies a vital place in the national economy. Entrepreneurs invest their own money, time. and ability in their business and contribute substantially to the community in terms of jobs and goodwill. Small business is necessarily small within its respective industry. but retail sales could approach several crores of taka annually. Small business has gained a major portion of our economy by contributing to personalized flexibility. creativity. specialization. communication. and performance. It also provides resources and serves as outlets for big business.
Many people become entrepreneurs because they enjoy self-expression, personal growth, community relations. and an opportunity to make a strong financial contribution to themselves and their loved ones. They are usually highly motivated. hard-working individuals who receive satisfaction from taking risks. Lack of proper management attitudes, training, experience, and skills-reflected in symptoms such as inadequate financing. poor location and weak planning -cause half of all businesses to fail by their third year.
Selected Definitions of Small Business
Small business means the size of which is not big the size again depends on the yardstick one uses to measure. What is small to one may be medium or even big to some others.
However, small businesses have been defined by various authors in various ways. Some such definitions are:
Small Business Act [SBA], 1934, “A business that is independently owned and operated & not dominant in its field.”
Bolton Report: “Report on the Commission of the Enquiry on Small Business Firms, 1977. “Small firm is one that has a relatively small share of its market. ”
Stoner, Freeman & Gilbert, 1995, “Small Business refers to businesses locally owned and managed, often with very few employees working at a single location.”
U.S. Govt. “A small business is one with fewer than 500 employees.:
Committee For Economic Development, “A small business is one which possesses at least two of the following four characteristics:
- managers are the owners
- Capital supplier & the owner is an individual or small group
- workers & the owners are local, market may not be so ——
- relatively smaller compared with the biggest unit in the industry[ sales, employees, etc.]
“All those businesses, manufacturing or otherwise which carried on in relatively small establishments.”
“A small business venture is any business that is independently owned and operated, not dominant in its field and does not engage in any new marketing or innovative practices.”
“A business which is usually organized and managed by the owner and or his family members.”
A deeper look of the definitions provided above shows that the basis of defining and understanding the meaning of small business has been attempted from different angles:
- the physical size of the unit;
- the size of investment;
- the size of employment;
- hired or self — management style;
- the type of energy used, man’s physical force, coal, electricity, gas, etc.
- market size- limited local or wide and also foreign;
- the extent of the use of technology & innovativeness; and
- nature and the sources of the capital supply, public issues or otherwise;
Small Business Definition – Learn From Scholars
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