Business Principles

It is the tradition of this country to encourage individuals to become entrepreneurs.

Few government controls, for example, prevent a person from launching a new business. Almost anyone who wishes to do so may start a business. Some require almost no money to start and can be operated on a part-time basis. As a result, many new businesses spring up each year.

These new businesses may have physical facilities, such as a store in a mall or a small rented space used for manufacturing or service activities. On the other hand, new business owners may work from home offices or even operate businesses that exist only on the Internet.

Small business is a term used to describe companies that are operated by one or a few individuals. Small businesses have always been an important part of our economy. By far the largest number of businesses operating in the United States are considered small, and about half of all employed people work for small businesses. In a recent economic slowdown when many large firms were laying off thousands of workers, small businesses were hiring in large numbers. Often the new entrepreneurs were highly skilled managers who had been displaced by large firms that were down-sizing. During that time, the number of applicants hired by small firms exceeded the number laid off by large firms. It is often believed that small businesses pay lower wages than larger businesses. Contrary to that belief, many of these small firms, especially those providing technical and professional services, were offering high-paying jobs.

Many small businesses are one-person or family operations with only a few employees. Examples include restaurants, gift shops, gas stations, and bakeries.

Computers have made it possible for small businesses to operate from homes and on the Internet. For example, consultants working from their homes can do much of their work by e-mail with clients, and craftspeople can offer their products for sale on the Internet, without the expense of a storefront.

Most large businesses today began as very small businesses. Because they were well managed and supplied products and services consumers desired, they grew larger and larger. For example, Subway began as a small business and now has over 25,000 restaurants in 83 countries. The first Kinko’s copy center was
opened by a new college graduate in 1970 to serve students and faculty at the University of California at Santa Barbara. Due to its popularity and success,  it expanded into more than 1,200 locations with 20,000 employees. In 2003, it was purchased by FedEx for over $2 billion.