Chapter 5 - Chapter 5: Options for Organizing Small and...

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Chapter 5: Options for Organizing Small and Large Businesses -90% of firms with employees have fewer than 20 people on staff. -98% have fewer than 100 employees -More than 20 million people in the united states earn business income without employees -almost 1/2 the sales in the US are made by small business -Small businesses generate 60-80% of new jobs over the last decade -Launching pad for entrepreneurs and prevalence of minorities WHAT IS SMALL BUSINESS? 1. The Small Business Administration defines a small business to be a firm that is independently owned and operated and is not dominant in the field a. Manufacturing business: fewer than 500 workers b. Wholesalers: Fewer than 100 workers c. Retailers: less than $6 million in annual sales d. Agricultural business: less than $750,000 2. Small Businesses size ranged from $500,000 to $25 million in sales from 100 to 1500 employees MAJOR INDUSTRIES DOMINATED BY SMALL BUSINESS 1. Construction 90% 2. Agricultural Services 88% 3. Services 56% CONTRIBUTIONS OF SMALL BUSINESSES 1. Creating New Jobs 2. Creating New Industries 3. Innovation SMALL BUSINESS FAILURE 1. 1 in 3 businesses closes permanently within two years 2. 50% of businesses fail after four years. 3. More than 60% of business fail within six years 4. By the 10-year mark, 82% of all small businesses have closed permanently REASONS WHY SMALL BUSINESSES FAIL 1.
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This note was uploaded on 02/01/2012 for the course ADMINISTRA 100 taught by Professor Reeves during the Fall '11 term at Rutgers.

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Chapter 5 - Chapter 5: Options for Organizing Small and...

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