How Small Modern Businesses are Developing in America

The United States in terms of entrepreneurship is an example for many countries. There are more than 20 million small firms officially registered in this country today. The current small business in America is so developed that each year there are about 1 million new organizations of this plan.

Statistics show that every third family is involved in a small business. What is remarkable, most of them start with a budget of only 1500-5000 dollars. In just a couple of years, these companies manage to reach a decent profit. Business projects can generate more than $1 million annually. U.S. entrepreneurs traditionally set up a company using only their own financial resources. No more than 10% of American businessmen use borrowed money.

The majority (over 90%) of entrepreneurs prefer to borrow money from: their family; relatives; close friends; and their own savings.

Where do they borrow?

It is not uncommon for small businesses in the U.S. to be statistically based as a home office. More than half of all small companies start up in this way. They manage to develop successfully. The initial investment for such firms does not exceed 25 thousand dollars.

Businessmen who decide to use someone else's finances as the startup capital are also extremely reluctant to take risks. Small companies in America take credit for this purpose in an amount not exceeding 100 thousand dollars. Another interesting fact is that American businessmen do not like to pay debts.

American businessmen take credit not only from banks. Venture capital funds are very popular in the country, many of which are willing to finance frankly dubious business programs. All in all these organizations annually invest about 36 billion dollars in the development of small businesses.

Franchising as a key feature

There are other features that characterize small businesses in the U.S. The key feature is widespread franchising. The country is rightly considered the birthplace of this trend.

The brightest representatives of franchising are General Motors and Singer, which began their successful development in the 19th century. The informational data is as follows: there are over 2 thousand franchisors in America. As for franchisees, there are many times more. The figure exceeds the mark of 600 thousand.

Thanks to this solution, opening a small business is much easier and faster. The one who offers and grants a franchise, makes it mandatory to immediately repay half of the cost of the finished project. The remaining funds can be paid for several years (up to 20 years).

With about 50 thousand dollars, American young entrepreneurs can get a ready-made profitable and promising business.

What will the businessman have to do? He needs to:

To find a good place to create an organization;
Select and provide training for the staff;
To quickly find and show the franchisor the recipes of dishes, if it is the opening of a cafe;
Make a list of products and goods that will be available.

The peculiarity of such a widespread direction in the USA is that the whole first year the project will be monitored by special managers. Specialists overseeing the program, to make sure that the case entered into the rut. Once the business is a little stronger, checks will be less frequent and meticulous.

The issue of advertising and equipment rental deserves separate attention, which confuses many Russian entrepreneurs and prevents them from developing. In America, the matter is simpler in this respect.

The cost of using innovative equipment, which is lent by the parent company, is only 8% of the revenue received. Also young entrepreneurs are given an opportunity to receive from the franchisor maintenance of all accounting of the company with a minimum percentage of the volume of proceeds.

The main characteristics of business projects in the U.S.

This is how small businesses in the U.S.: illustrative examples of running allow you to realize the scale of small businesses. It is worth stating at once that they look much more solid and respectable than firms of this plan in Russia and even in Western Europe.

A small company in the United States is represented by:

A staff of from 1 to 1.5 thousand people;
The possibility of a promising and profitable development of women's business projects;
Annual turnover of up to 15 million dollars.

Not surprisingly, in this country, small businesses can address both the sale of groceries or lingerie, and the development of catering and oil refining.

Another unique characteristic of small American businesses is their loyalty and adaptability to women's projects. More than 9 million women are officially registered as managers of small firms in the United States. They earn enormous sums each year. Statistics indicate figures ranging from $180 billion to $200 billion.

Why has a small business in this country turned out to be so promising and profitable? All this is because it is actively supported by state acts, documents and legislation in general.

The authorities of the country are sure that without this niche state economy can not be promising and successful. That is why such small entrepreneurial projects are fully supported from above. First of all it is shown in progressive and very flexible system of taxation. Only those who earn a lot and actively pay big taxes.

The challenges of small business in the U.S.

Small business in the U.S. is a huge space, 60 percent of all jobs. This includes businesses of all sorts, from fast-food chains, cafes and restaurants, to high-tech small firms The government's role in small business development is driven by the need to identify the latest trends, forms and methods of financial, economic, regulatory and legal protection for small businesses that play a key role in creating jobs, developing and implementing new technologies, and fulfilling government contracts.

Although the U.S. economy in many respects is a model for many countries around the world, the U.S. economy in many respects is a model of regulation for small businesses.

problems very familiar to our entrepreneurs.

It seems like a shame: In the U.S. small businesses are a big part of the economy and a major source of job creation. Companies with up to 500 employees employ 60 million people. Small businesses (under 20 employees) account for 18% of private-sector jobs. Plus to the 21 million self-employed people in the United States. In 2010, 394,000 startups created 2.3 million new jobs (an average of 5.8 each).

But the rate of new company creation has slowed dramatically in recent decades. Both the number of new companies and the number of firms under five years old have declined. Only after 2008, when workers laid off from big corporations started their own businesses, did the trend begin to turn around, and the decline stopped.

One of the biggest problems for small businesses in the U.S. is taxes. It is very difficult to start a business because of license fees, payroll taxes, and sales taxes. Indeed, the design of sales and payroll taxes is one of the most complicated in the world.

Taxes are confusing as hell. The sites through which taxes can be paid electronically are very complicated, and the IRS employees you go to for advice are often confused and make mistakes, giving different answers to the same question.

The main problems with the tax system are complexity, frequent changes, and fractional regulation. Taxes are regulated by four levels of government: federation, state, county, and municipality. The forms of tax tax returns change with a frequency of twice a month.

To hire an employee, you must register with five different state agencies. Many small business owners think that taxes are set arbitrarily and unfairly.

The second problem is State Regulation. The difficulties with of getting all sorts of permits and licenses, American businessmen complain almost as much as Russian businessmen.