A small business is a for-profit company that typically employs fewer than 500 people and has lower revenue than large corporations. This type of business can be structured in any legal form, including a sole proprietorship, partnership, or corporation. Small businesses can self-certify as small to help gain access to government contracting opportunities, funding, and other resources.
Small businesses play a vital role in innovation, job creation, and economic resilience across the country. They are also the backbone of our economy, accounting for 99.9% of all businesses in the United States, according to the Office of Advocacy at the U.S. Small Business Administration.
In 2023, a Pew Research Center survey found that most Americans – especially young people – think owning a small business is important to their personal definition of the American dream. In fact, most young people say that owning a business is even more important than having good jobs or financial stability.
Entrepreneurs often start a small business as a way to express their passion, take on new challenges, and be in control of their own destiny. They want to build a business that serves their customers, makes them proud, and provides financial stability for their families. And they want to have a flexible work schedule so they can balance their family life with their professional ambitions.
Choosing the right legal structure for your business is essential. It affects your legal responsibilities and tax implications. For example, the decision of whether to set up your business as a sole proprietorship, partnership, or limited liability company will impact how you manage your company’s finances and operations.