Introduction

In today's economy, there has been a shift from large business to small business operations. The Small Business Administration (SBA) defines a small business as one that is “independently owned and operated” (Nickels, McHugh, & McHugh, 2015, p. 162). Next, a small business is not a dominant competitor in its business field of operation. Finally, a business operation is only classified as a small business when it meets certain standards of size, employment and annual revenue. While a small business operation competes in the same market as large corporations, a small business will only be able to control a small portion of the total market share and revenue earned by the industry. As a result, a small business is considered “small” to the other companies and competitors in its industry.

There are currently over 28 million small businesses in the United States. The combined total revenue of small businesses accounts for “over fifty-percent of the gross domestic product (GDP) of the United States” (Nickels et al., 2015, p. 163). Small businesses in the domestic market have helped to improve the economy and quality of life. First, small businesses have generated an increase of new jobs and career paths for current and future employees in the business market. Next, small businesses are responsible for employing the majority of individuals who work in the private sector. Third, small businesses provide many employees with their first position in the workforce. Finally, small businesses are able to offer new advantages that large corporations are unable to produce by focusing on niche markets and providing a high level of customer service and response to new opportunities in the market.

While small businesses are responsible for producing the majority of the GDP, many small businesses do not survive past the first years of operation. This situation is due to many factors. First, small businesses can close in order to change business types that will cause the existing business to technically be reported as a failure. Next, a small business owner can decide to leave a small business in order to pursue a new opportunity in the market. This situation will also result in the failure of the existing small business. Third, the small business owner can choose to retire. As a result, the small business is unable to live past the life span of the individual and will fail.