Welcome back to the Scale Your Small Business Podcast with your host, Jillian Flodstrom. Today, we’re going to quickly and concisely break down what exactly a small business is, its definitions, and types, and get some clarity on what type of shop you run.
The Small Business Association (or SBA) is a massive entity that helps small businesses across the country run. Their definition of a small business is “a privately owned corporation, partnership, or a sole proprietorship, with less revenue than a corporation or regular-sized business.
But what does that really mean? It’s no more than 1500 employees and less than $38.5 million in revenue. That’s a huge number, right? Don’t worry, about 90% of small businesses have less than 20 employees. Plus, small businesses with that many employees make up 89% of all businesses in the nation. Truly, small businesses make the world go round. However, you can see why there is some confusion about what a small business actually is.
When someone says they run a small business, they could be on their own just getting started or they could have 30 employees with millions in revenue.
There are four types of small businesses: sole proprietor (one-person show), partnership (two people), corporation, or LLC.