The small business and entrepreneurship climate in the United States is thriving. There are nearly 30 million small businesses in the US today, making up more than 99% of all businesses and providing 64% of net new American jobs, according to the Small Business Administration’s Office of Advocacy. A range of economic, demographic, and technological factors have converged to create an incredibly dynamic landscape for US small business owners and would-be entrepreneurs.
The resources available to these citizens have also multiplied. In this article, we explore the best US resources small business owners and entrepreneurs can access to guide their growth and manage their challenges.
What is a Small Business?
The term “small business” generally denotes any commercial venture with fewer than 500 employees. This size range is incredibly versatile, given that the specific size limit can vary by location, industry, and other factors. The US Small Business Administration (SBA) provides additional definitions to help guide its program decisions, such as the Small Business Development Centers (SBDC) and others.
The Benefits of Starting a Small Business in the US
Small businesses and entrepreneurs make up a cornerstone of economic activity in the US. There are several advantages to starting a business in the US versus elsewhere, including the following.
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A Large and Diverse Consumer Market:
The US consumer market is the largest and most diverse in the world. This gives small business owners and entrepreneurs access to an established base of consumers with vast opportunities for growth and targeting. -
Simple Business Entity Formation:
Most states have easy-to-follow processes for forming a US business entity. From online filing systems to helpful resources such as legal advisors and advisers, US entrepreneurs have access to the tools they need to move quickly and accurately. -
Tax Advantages:
The US boasts one of the most advantageous tax policies in the world. Most small businesses can benefit from deductions, credits, and exemptions, with specific programs available to support small businesses. -
Supportive Network and Infrastructures:
The US offers entrepreneurs numerous educational resources and other forms of aid to support their efforts. From expansive university programs to SBA funding and private business accelerators, there is an abundance of knowledge, advice, and capital available to the US small business owner and entrepreneur. -
Vibrant Technology Ecosystem:
In the US, small businesses and entrepreneurs have ready access to cutting-edge technology and tools. They also have ready access to talented personnel to help maximize the resources they have at their disposal.
Understanding the Different Structure Types for US Small Businesses
Small business owners and entrepreneurs in the US have a variety of business structuring options. Knowing which type best meets their needs will go a long way towards ensuring their businesses’s long-term success. Below are some common business structures used in the US.
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Sole Proprietorship:
Sole proprietorship is the simplest and most common form of business entity in the US. This structure involves one owner, who is personally liable for the business’s taxes, debts, and liabilities. -
Partnership:
A partnership involves two or more owners who are jointly responsible for the business’s taxes, debts, and liabilities, as well as capital investments and decision-making. -
Limited Liability Company (LLC):
An LLC is a business structure where the owners have limited liabilities and are not personally responsible for the business’s debts or liabilities. -
Corporation:
Corporations are complex business entities that offer their owners limited liability and ongoing legal and tax protections. This type of structure is generally better-suited to larger businesses. -
Non-Profit Corporation:
Non-profit corporations are 501(c)3 public charities created to fulfill a specific purpose, such as scientific research, art, education, or religious activities. Non-profits are exempt from some taxes, and contributions made to them are tax-deductible.
Funding Small Businesses and Entrepreneurship in the US
The US Small Business Administration (SBA) and other government body-authorized resources are good options for finance and capital management. Below are some of the most important resources for funding and managing the growth of small businesses and entrepreneurship in the US.
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The Small Business Investment Company (SBIC) Program:
This program provides guaranteed debt capital, equity and venture capital, and other forms of financing to eligible small businesses. It is designed to strengthen the small business economy by providing capital and strengthening businesses’ private equity base. -
SBA Loans:
The US SBA provides several types of transactions such as microloans, 7(a) loans, and 504 loans that are financially backed by the agency. These loans are excellent options for business owners and entrepreneurs seeking larger capital investments. -
Grants:
The US government also provides a range of grants to small businesses, from R&D grants to energy efficiency and other technological upgrades. Grants are ideal for an entrepreneur looking to launch or grow in a specific niche. -
Angel Investing:
Angel investors are individuals or groups who provide capital in the form of equity investments for startups and small businesses. The investor typically takes equity in the form of ownership, but no management role. -
Crowdfunding:
Crowdfunding is a popular form of online fundraising using sites such as Kickstarter and Indiegogo, as well as a number of venture capital funds. Platforms like this allow entrepreneurs to quickly connect with potential donors and often offer rewards in exchange for the contributions. -
Traditional Bank Loans:
Traditional bank loans are an ideal solution for more established businesses. These loans come with more stringent eligibility criteria and may require collateral, but they can provide relatively large amounts of capital at competitive interest rates.
Maximizing Your Growth Potential as a Small Business
Though every small business and entrepreneur is unique, there are a few universal tactics that can help ensure success.
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Create a Strategic Plan:
Creating a strategic plan is perhaps the most important first step. This plan serves as the road map for your business, outlining specific goals and objectives, and the metrics you will use to evaluate success. -
Set Benchmarks for Performance:
Benchmarking is a great way to measure progress, gauge performance, and identify areas for improvement. This can be especially helpful for entrepreneurs who need to make sure their operations are up to industry standards. -
Utilize Advanced Technology:
Given the prevalence of systems and technologies available to entrepreneurs today, utilizing the right tools and technology is key. Whether it’s a Bitcoin wallet to facilitate payments or a sophisticated CRM to facilitate customer engagement, small business owners should embrace advanced technology and leverage it to their advantage. -
Build a Team:
It takes a great team to build and grow a successful small business. Entrepreneurs should build a great team of professionals to help them make the best decisions, develop solutions, and manage the day-to-day operations. -
Take Calculated Risks:
Growth occurs when entrepreneurs are willing to take risks. These risks can largely be mitigated through careful planning and research, but it’s important to be aware of potential risks and be willing to take calculated chances in order to obtain desired results.
Small business ownership and entrepreneurship are flourishing in the US. With the right resources and strategies, small business owners and entrepreneurs can take advantage of a wide range of advantages, such as US consumer spending potential, tax benefits, and access to advanced technology and tools. Investing in a well-crafted strategic plan and utilizing best-in-class tools and technology are two great ways to ensure the long-term success of a small business. With the right resources and attitude, US small business owners and entrepreneurs have a great chance of achieving both short and long-term success.
