What is Small Business?

family law intensiveWhilst there are many definitions of small business, one of the most appropriate definitions and one that resounds with small business owners themselves is:

a business in which all the critical management decisions are made by one or two people without the aid of internal specialists”

Many academic papers and research in an attempt to distinguish between small and medium business use the cutoff point for small business as 100 employees. However the majority of small businesses in Australia have less than 20 employees.

It is estimated that 95% of all businesses can be classified as small and that there are between 700,000 and 900,000 small businesses in Australia.

The majority of small business owners are self motivated resourceful people who are seeking business and financial independence. Research in this field indicates strongly that whilst small business owners have highly developed skills in their particular trade, occupation or profession, many have very little knowledge in general management and bookkeeping skills.

A large number of people in small business consider that they can ignore the “big business” issues such as management, marketing, advertising, accounting and finance as being unrelated to their business of being a ….

This in some ways is the reason that many small business owners fail to move beyond an employee working for the worst employer in the world – themselves. By ignoring the fundamentals of running a business, they end up spending too much time working in the business rather than on the business. The in-the-business owner spends all his time doing the work of the business rather than concentrating on what do I have to do to change this business into one where I am redundant in my own business.

The on-the-business owner spends time creating systems so that he can employ others to do his work. It has been said that a business is only a network of systems and employees only purpose is to work through those systems.