The Small Business
A small business is a business that is independently owned and operated, with a small number of employees and relatively low volume of sales. The legal definition of “small” often varies by country and industry, but is generally under 100 employees in the United States and under 50 employees in the European Union. In comparison, the definition of mid-sized business by the number of employees is generally under 500 in the U.S. and 250 for the European Union. Small businesses are normally privately owned corporations, partnerships, or sole proprietorship. In Australia, small business is defined as 1-19 employees and medium businesses have 20-200 employees.
In addition to number of employees, other methods used to classify small companies include annual sales , value of assets and net profit , alone or in a mixed definition. These criteria are followed by the European Union, for instance headcount, turnover and balance sheet totals. Small businesses are usually not dominant in their field of operation.The smallest businesses, often located in private homes, are called microbusinesses. The term “mom and pop business” is a common colloquial expression for a single-family operated business with few (or no) employees other than the owners. When judged by the number of employees, the American and the European definitions are the same: under 10 employees.