Small Business Opportunity

Small Business means a business, which involves a small number of employees. But the definition of “small†varies from country to country. In U.S.A small businesses are considered as those, which are having less than 100 employees whereas in European Union it is less than 50 employees. But other than this method of classifying small business, there are also other methods such as annual sales or turnover, assets value or net profit. We can also go by a mixed definition that is we can consider headcount, turnover and net profit altogether. In general, we can say, a small business means a business, which is owned and operated independently, that is operations and decision-making are under the total control of owners; equity is not traded publicly and financing is done by the owners and the number of employees is small. The picture will be vivid if we look at the nature and characteristics of small-business, which are as follows:

• Business operations and decision making rests in the hands of one or two persons who are owners or partners.
• Business equity is not traded publicly.
• Ownership and management are not separate in general.
• Formal contracts are kept at a minimum level.
• Personal security of owners is very important for secure business debt.

Opportunity is something very important because it is the major job provider in the most of the countries. it can be started with a low level of capital and can be operated on a part time basis. Small business operators tend to share a close relation with their clients and customers and therefore they can achieve greater accountability and responsiveness. These opportunities can be used in various forms.

Small Business can be a privately owned corporation, can be a partnership, sole proprietorship, or franchising.Partnerships are better as business opportunity compared to privately owned corporations for taxation purposes. Because in a partnership firm dividend tax is eliminated which is levied on realized profits of an ownership corporation.

Sole proprietorship also has great business opportunity which small business desperately requires. Whereas identical small business operating as a privately owned corporation or partnership submit a lengthy tax return which consists of quite a few pages and also presents quarterly and annual payroll tax returns, a sole proprietorship enjoys a lot of liberty from government regulations. Among every form of business ownerships sole proprietorship suffers from least number of government regulations.

Franchising is also a very good small business opportunity as by franchising the owners can reap the benefit of economies of scale of the big corporation (franchisor). Through franchising the owners get to use a strong brand name and at the same time they can continue having an affordable level of investment.

Small business enterprises and sole proprietors require business support system which are easily understandable and can cater to the needs of their small businesses in order to be competent and to utilize the new business opportunities properly.

If the small-business enterprise has investment up to Rs.500, 000 in fixed assets, excluding land and premises; that can fall under the category of SSSBEs that is Small Scale Service/Business Enterprises. Moreover, the limit is now increased up to Rs.1 million. If a enterprise is recognized and registered as SSSBE then it can enjoy the advantages of various policies, which are applicable for SSSBEs.

Some of the policies and schemes for SSSBEs are as following:

• National Equity Fund Scheme which offers equity to small business enterprises to set up business.
• Mahila Udyam Nidhi Scheme provides equity to women who want to start business.
• Scheme for financing the marketing related activities like market research, participation in exhibitions and trade fairs, advertising, setting up of retail outlet.
• Equipment Finance Scheme for buying necessary equipment like generator sets which are not directly related to any specific project.
• Single Window Scheme to supply term loan for fixed assets and loan for working capital through the same agency.
• Venture Capital Scheme for encouraging small enterprises to buy capital equipment and to acquire developed technology and to expand their capacity.
• ISO 9000 Scheme to spend on equipments, audit, consultancy, documentation, certification fee etc.
• Technology Development & Modernization Fund Scheme to provide finance for up gradation of technology and modernization of the small business organization.