In contemplating an essay about the definition of a small business, I considered many characteristics. The SBA defines a business as “small” based on annual revenue, and the SBA size standards are assigned according to industry. In other words, in one industry a company is considered a small business if it generates less than $7 million per year, while in another industry a company may be considered a small business if it generates less than $500,000 per year. For the SBA, the term “small business” denotes a business that qualifies for SBA programs and resources.
A business can also be categorized as “small” based on number of employees. In general, the IRS considers a small business as one that has less than 100 employees. Various government agencies in the U.S. have their own standards for determining whether a business is technically considered small. For the purposes of financing, official classification, and eligibility for government and private programs for small businesses, you will need to research the specific organization’s definition of small business to see if your business would be included in the definition.
Although the official definition of small business varies from one organization to another, in my mind, there are certain essential characteristics that define a small business, regardless of number of employees or annual revenue.
1. Small Staff that Works as a Team to Divide Tasks
In any small business, the number of employees is smaller than the number of job descriptions included in the company. This means that each employee has to fill multiple roles. For example, in a traditional small business the owner might act as a salesperson, accountant, and inventory manager. One employee may handle customer service, signage, and cleaning tasks. It’s true, in most businesses big and small there is incomplete division of labor. Most employees have at least a few tasks to handle. But in a small business, an employee’s tasks are often incongruous. The same employee with expertise in engineering may be called upon to handle marketing, even though he/she has no experience in marketing.
2. Limited Resources to Hire New People
A small business usually has a core staff who functions as a team to complete all the included tasks. As an employee or even an owner of a small business, you will more than likely be required to branch out into tasks that are not your forte, because the business cannot afford to hire a specialized person for every job.
3. Synergy Between Employees
The third aspect I think is essential to small businesses is that everyone involved must have passion for the work, the mission, and/or the company. A heightened level of dedication by every team member is essential for a small business to flourish. In psychology, this is called synergy, and is defined as a system in which the team as a whole surpasses the sum of its parts. In other words, when we work together, the shared energy allows us to achieve more than we would have achieved separately.
Most small businesses struggle with growth because the owner is too busy to take on marketing singlehandedly. But, unless you opened your doors to a huge client base from the start, you will need to grow in order to stay in business. If your staff doesn’t synergize, you may find that growing your business is next to impossible.
Growth comes from keeping existing customers AND finding new customers, not just one or the other. While everyone in your staff doesn’t necessarily have to participate in marketing efforts, you need everyone to be “on board” with your plans. Your entire staff has to believe in what you’re doing, and in the future of your business, or your growth will be stifled from day one. At the very least, your entire staff should talk up your business and help draw traffic to your doorstep or to your website.
In this post I’ve discussed some hallmarks of successful small businesses, but one of the great things about small businesses is that there is no single formula for success. Your passion is what got you into business in the first place, and your single biggest mistake could be becoming too busy with daily maintenance to let your passion carry the business in new directions.
Do you have a small business or are you a solo-preneur? Are you in need of administrative support help? Do you find that you use the time that you should be earning money to complete day-to-day support tasks? Hiring a virtual assistant may be the perfect solution for you.
According to the International Virtual Assistant Association, “A Virtual Assistant (VA) is an independent entrepreneur providing administrative, creative and/or technical services. Utilizing advanced technological modes of communication and data delivery, a professional VA assists clients in his/her area of expertise from his/her own office on a contractual basis.”
Virtual assistants have a multitude of skills, and work with business owners as office support staff. In the business world, they are referred to as secretaries, office assistants, administrative, and executive assistants. Virtual assistants work from their own office and have their own equipment. They pay their own taxes, and charge only for actual time worked. By contrast, for in-house support staff, you are responsible for salaries, benefits, equipment, office space, and employment tax. Virtual assistants are a cost-effective way to run your business.
Hiring a virtual assistant is a necessity for many small business owners. VAs can be responsible for such tasks as general administrative support, web design, content creation, article writing, blog updates, and email campaigns – or your social marketing needs. With your busy work covered, you are able to concentrate on the task of earning revenue for your business.
Most virtual assistants see themselves as a partners working with you to help grow your business. They can also be a source of networking for business resources and tools. Although they work off-site and independently, they can become an important part of your team.
Finding and hiring the virtual assistant is not something that you want to rush into. Before choosing a VA, you should to discuss their skills, services, and fees, and you should check their references. Ask for referrals from friends, business contacts, and other small business owners. You can search online virtual assistant organizations such as www.ivaa.org or www.virtualassistantnetworking.com.
Virtual Admin Professionals is a virtual assistant company that provides online business management services to business owners seeking administrative help. If you are interested in hiring me as a VA, visit my website at www.virtual-admin-professionals.com. I offer a 30-minute free complimentary consultation so that we can discuss your needs, and how I can be of assistance to you and your business.
As part of President Obama’s efforts to help us recover from the economic disaster of the past few years, from June 15, 2009 to September 30, 2010, the Small Business Administration is offering a guaranteed loan program for small businesses. This program, called the ARC loan program (Americans’ Recovery Capital), is designed to provide short-term financial relief to struggling but promising small business throughout the United States.
ARC loans are capped at $35,000 and are intended to be used to make payments on interest and principal of existing loans and other debts (including suppliers, credit card companies, and other major expenses), thereby allowing small businesses to defer their income directly to operating expenses such as payroll, utilities, and necessary supplies.
These loans are not granted by the SBA directly, but by other lenders. The loan funds can be drawn down over a 6-month period. The loans are interest free and the borrower is not required to begin making payments on the ARC loan for 12 months after the final disbursement. Repayment may be extended over a period of up to 5 years.
Although the SBA guarantees repayment of the loan to your lender, the SBA does not charge a fee for its involvement in this program. The entire goal of the program is to help small businesses to stay in business while the economy is struggling. The SBA has taken the position that by decreasing the risk to lenders, they will be increasing our access to much-needed funds. It’s a win-win situation.
To be eligible for an ARC loan, a small business must demonstrate its viability or past success. The loan funds can only be used for approved debt, and you may be required to provide various documentation to your lending institution. In some cases, your regular bank may be able to offer you access to this program.
On behalf of small business owners, I think it is admirable that our president has taken measures to help small businesses, which generate billions in revenue in the U.S. every year.
Call your bank or visit the SBA website and learn more about how to apply for an ARC loan.