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What Is A Small Business?

By Chris Johansen

Are you tired of feeling like you work harder and harder and get no benefit from it? Perhaps you feel like you have a great business idea to fill a real need in your community. If so, you may want to consider branching out on your own and starting an entrepreneurship of your very own. Before you start, however, you may want to get as many facts as you can. What better way to start is there by asking exactly what is a small business?

There are some basic criteria involved when defining this term. A small business is often defined as a business that is privately held and run. It normally has a lesser number of workers and does a low amount of total sales. This type of business is usually a sole proprietorship or corporation.

The lawful meaning of the term small does vary from country to country and can be based on several factors. A business of this type can be classified strictly by the quantity of personnel that company maintains. Even this can differ from place to place, with some countries defining it with as little as fifteen workers while others classify it as anything under five hundred.


Sometimes the definitions can vary within the same country. In Canada it can be seen as this type based on the number of workers or based on the annual revenue. It all seems to depend on which organization you ask.

One organization states that a small business is defined by the amount of revenue they generate. In their view, a business that has revenue between thirty thousand dollars and five million dollars is considered small. Other people may differ with this opinion.

Another firm has a completely different take on the subject. They define the term as a business that has less than five hundred employees and generates less than fifty million dollars in revenue. This may seem like a very broad spectrum when trying to pinpoint a description.

A third definition also can be found among Canadian groups. There is another approach that believes the phrase is described by the number of employees. Here, a small business would be defined as an operation that has fewer than fifty workers in its fold.

So what is a small business? It seems that the definition itself is somewhat broad, but there are some basic facts that are maintained within. It is a privately run organization with a small number of employees. In any case, when looking to start this type of company yourself, it will take a lot of effort and hard work to get things up, running and profitable. Some people may have difficulty handling all the responsibilities that come along with operating a small business. Companies can assist you with items like payroll, taxes, accounting and general consulting. There are many services available that can offer you professional advice and help to keep things running smoothly for you.

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