Advantages and Disadvantages of Sole Proprietorship
Entrepreneurship
Desire to create a new business
Small business
Independent business with fewer than 500 employees
Inter-American Development Bank (IDB)
MDB that provides loans and assistance to Latin American countries
Dredging
Small-business size standard: $27.5 million
Discount stores
Small-business size standard: $29.5 million
Department stores
Small-business size standard: $32.5 million
Multilateral development bank (MDB)
Bank that provides loans to developing countries for economic and social progress
Closed corporation
Corporation with stock owned by few people and not sold to the general public
Open corporation
Corporation with stock that can be bought and sold by any individual
Advantages of sole proprietorship
Ease of start-up, availability of capital and credit, personal interest, combined business skills and knowledge, retention of profits, no special taxes
Small businesses' contributions to the U.S. economy
Employment, payroll, net new jobs, exporters, export value
Small Business Administration (SBA)
Government agency that assists, counsels, and protects the interests of small businesses
Technical innovation
Incidence of innovation higher among small-business workers than large-business workers
European Bank for Reconstruction and Development
MDB that encourages reconstruction and development in Eastern and Central European countries
African Development Bank (AFDB)
MDB that fosters economic and social development in African countries
Asian Development Bank (ADB)
MDB that promotes economic and social progress in Asian and Pacific regions
World Bank
MDB that provides low-interest loans, credits, and grants to developing countries
Small-business size regulations
Regulations periodically revised and simplified by the SBA to define small-business size
Stock
Shares of ownership in a corporation
Industry-specific smallness
Size of a small business determined by number of employees and/or sales revenue in a particular industry
Nonemployers
Small businesses with no employees, only the owner
Special trade contractors
Small-business size standard: $15 million
Furniture stores
Small-business size standard: $20.5 million
Travel agencies, tour operators
Small-business size standard: $20.5 million
General and heavy construction (except dredging)
Small-business size standard: $36.5 million
Retail trade, barber shops, beauty salons
Small-business size standard: $7.5 million
Agriculture
Small-business size standard: $750,000
Wholesale trade
Small-business size standard: 100-250 employees
Manufacturing and mining industries
Small-business size standard: 500-1,500 employees
Small-business size standards
Standards stated in number of employees or average annual sales to define small businesses in various industries
Joint venture
Temporary association of individuals or firms organized to perform a specific task
Syndicate
Temporary association of individuals or firms organized to perform a specific task that requires a large amount of money
Disadvantages of sole proprietorship
Unlimited liability, lack of continuity, lack of money, limited management skills, difficulty in hiring employees
