All the big businesses that you know started one day as small businesses. However, starting a business is not easy. Most people get discouraged after they perform a market search and get to know the high costs and bureaucracy of staring a small business. However, you will enjoy many benefits from starting a small business.
A small business will give entrepreneurs a chance to become their own bosses. Also, building the business from scratch will save you from the drawbacks of using a franchise model. Even though franchises are proven models, there is no guarantee that starting them in the new location they will succeed. You will have the chance to develop the business at your pace and try the different ideas that you have.
2. Liability and Taxes
When your small business starts to grow, you can incorporate it, make it a limited liability partnership or a limited liability company and enjoy the legal protections. Forming your business into these types of companies will protect your assets from the liability that the business incurs. In a limited liability partnership, you will not be held liable for the inaction of another member of the business. When running a small business, you can take advantage of tax deductions by writing off any qualified expenses such as the purchase of equipment.
3. Start-Up Costs
A key advantage of starting a small business is that you can start small and scale up your operations progressively. Using this model will lower the start-up costs significantly. For example, you can even start from your home and eliminate the cost of renting a place.
Also, if you have a very good idea, there are many investors who can give you money to start the business. All you have to do is convince them that the idea is viable. You can even apply for government grants for small businesses.
4. Response to Changes in the Market
The business environment is dynamic. Different factors that have an impact on the performance of your business will change on a short notice. However, it is easy for a small business to adapt to these changes compared to the large organizations. For example, if customers are starting to prefer a certain specialized service or product, it is easy for a small business to incorporate the new product or service. However, for a big corporation to make such a change, it will be expensive and take more time because of the scale of their operations.
Staring a small business offers an entrepreneur various benefits. Also, it is a step in the right direction towards building a successful organization. You also become your own boss.