What Are the Characteristics of a Small Scale Business?

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Small-scale businesses rely on person-to-person contact.
Small-scale businesses rely on person-to-person contact. (Image: handshake image by dip from Fotolia.com)

Entrepreneurs and those who work for small businesses tend to enjoy doing a variety of tasks, and are generally flexible people. With low sales volume and high dependence upon people and labor, the atmosphere and workplace culture in a small business contrasts with those in a large, well-funded corporation.

Definition

In the Small Business Act, a small business is defined as "one that is independently owned and operated and which is not dominant in its field of operation." The Small Business Administration (SBA) has formulated specific size standards for businesses in different industries; in order to qualify for SBA business loans, a business must meet the specifications.

Capital

Small businesses usually have much smaller capital that larger enterprises. The term "shoe-string budget" refers to businesses that operate under very tight budgets. Small businesses are sometimes run out of a room in the business owner's home; this cuts the cost of renting office space.

Workplace Culture

Small businesses have fewer employees. Employees of small businesses are less specialized than in larger businesses. In larger enterprises, employees have specific job descriptions, but in small businesses employees are more often expected to help with a variety of tasks, because there are fewer people to do everything. Some personalities prefer the flexibility that working for a small business may require.

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