A small business is a privately owned and operated business model. Typically, small businesses operate with a small number of employees and a relatively low volume of income, profit, and sales. Small businesses are held separate form larger companies because they are normally privately owned.
Although even massive corporations can be privately owned, a small business is typically operated in full by a few employees. A small business is legally established as either a corporation, a partnership, or a sole proprietorship.
In the United States, small businesses, their legality concerns, and their overall framework is established and supervised by the Small Business Administration (SBA). The Small Business Administration is a Government program that aims to provide resources and aid to small businesses and entrepreneurs throughout the country. Small businesses have been a staple in American culture. The United States Constitution created a free market where individuals were encouraged to innovate the market and offer their skills to progress society.
In addition to the aforementioned services, the Small Business Administration also established business size standards, on an industry-by-industry basis, for the proper classification of all small businesses. Although these classifications are based on industry, in general the Small Business Administration categorizes a small business as having fewer than 500 employees (primarily used for manufacturing businesses) and less than $7 million in annual receipts for all other industries. In addition to the number of employees and annual receipts, other methods used to determine or classify a small business are: amount of annual sales or turnover, value of all assets, and net profit (the balance sheet).