Many small businesses can be started at low cost and part-time, while a person maintains a regular job with their employer or provides care for family members at home. In developing countries, many small businesses are sole proprietorship operations such as selling produce at a market stall or preparing hot food to sell on the street, providing little income. In the 2000s, small businesses were well suited to online marketing; Because it can easily serve specialized fields, something that would have been more difficult before the Internet revolution that began in the late 1990s. Online marketing gives small businesses the ability to market with smaller budgets. Adapting to change is crucial in business especially small businesses; Because they are not bound by the bureaucratic inertia associated with large companies, small businesses can respond to changing market demand more quickly. Small business owners tend to have closer personal contact with their clients and customers than larger businesses, as small business owners see their clients in person every week.
One study showed that small local businesses are better for the local economy than introducing a new chain store. By opening new chain stores nationally, the profits of locally owned businesses decrease dramatically and many businesses end up failing and are forced to close. This creates an exponential effect. When a store closes, people lose their jobs, other businesses lose business due to failed businesses, and so on. In many cases, large companies replace many of the jobs they create.
Independence:
Independence is another advantage of owning a small business. The small business owner does not have to report to a supervisor or manager. Also, many people want to make their own decisions, take their own risks, and reap the rewards of their efforts. Small business owners have the flexibility and freedom to make their own decisions within the constraints imposed by economic and other environmental factors. However, entrepreneurs have to work very long hours and understand that their customers are ultimately their bosses.
Small businesses (often run by family members) may adapt more quickly to changing circumstances; However, they may also be closed to absorbing new knowledge and hiring new labor from abroad.
Financial report:
Small businesses benefit from less extensive financial reporting and accounting requirements than those faced by larger businesses.
The EU Directive on Annual Financial Statements 2013 aims to “reduce administrative burdens and provide simple and robust accounting rules, especially for small and medium-sized enterprises (SMEs)”. In the UK, the Companies, Partnerships and Groups (Accounts and Reporting) Regulations 2015 transposed the EU Directive into UK law and amended the reporting regime to reduce disclosure accounts for any accounting period beginning on or after 1 January 2016. 'Shortened accounts' were permitted for smaller entities within FRSSE, Financial Reporting Standard for Smaller Entities). Until 2015, companies considered small under the UK Companies Act 2006 were allowed to use this standard. For accounting years ending on or after 1 January 2016, FRSSE is no longer available, but there are options known as “abbreviated accounts” and “full accounts”:
Abbreviated Accounts: Represents profit/loss beginning with the declaration of gross profit or loss, not turnover
Financial statement segments or accounts segments: Profit and loss accounts are excluded, but the balance sheet and notes balance sheet are to be disclosed.
Alternatively, smaller companies can offer “small entity accounts.” Financial Accounting Standard No. 105 is the financial reporting standard applicable to the micro-entity system.
