Starting and growing a small business is a challenge that requires grit and determination, but it’s not impossible. In fact, more than 33 million small businesses thrive in the United States, creating jobs and contributing to local economies across all sectors of the economy.
A small business is a privately owned company that is primarily engaged in one or more types of production and is neither a dominant firm nor a large enterprise within its industry. It may take any of several legal forms, including a sole proprietorship, partnership, corporation, or limited liability company. The Small Business Administration sets size standards that vary by industry to determine which companies qualify for specialized federal programs.
As a result of being in closer contact with customers and clients, smaller firms are better positioned to adapt to market changes. They also tend to have fewer bureaucratic barriers to innovation than large enterprises. In addition, a lack of scale and limited resources often means they are more vulnerable to downturns in the business cycle.
While pandemic-era support for small businesses has passed, ongoing support like the Small Business Administration’s 7(a) and 504 guarantee programs have been successful in supporting small business growth by easing credit standards and encouraging lenders to increase lending to the sector. However, despite these positive trends, it’s important to understand the challenges small businesses still face and how they can overcome them.