The Evolution of the Small Business in North America
Small businesses, the “Mom and Pop” operations that were predominant 50-100 years ago are changing. The first goal of any business, large or small, is to become profitable; to take in more than it spends. Once profitability is assured, the business owner can think about going public and offering a share of the business to those who wish to buy common stock in an Initial Public Offering, the IPO.
But a new wrinkle is taking place in today’s business world. Now small business owners even before reaching profitability go in search of funding. This is referred to as an initial round of financing. The new company is contacting venture capitalists in hopes of receiving capital for the further development of their business in exchange for a share of the company’s ownership. The “Mom and Pop” concept is loosing adherents but continues to exist in business creation.
Economies Are Changing from the Production Model to the Service Model
Canada and the United States are rapidly changing from businesses that are producing products to those offering services. The “Mom and Pop” grocery store has changed to the “Mom and Pop” day care center.
These service-centered businesses have no inventory and limited overhead. Profitability for such small businesses is easier to achieve than for product-oriented businesses with inventory and overhead to cover. Any service-centered business also offers a benefit to the community, and initial funding and grants are easier to obtain.
Small Businesses Must Rely on a Local Funding Source
Any small business must have funds ready to provide for both slow sales times and expansion. A local banker is a needed ingredient in any business plan. You local banker will be aware of funding options for all businesses, and this advice will be invaluable in the future of any business development. Your banker is aware of any government grants for small businesses and government funding programs. Bankers are aware of small business grants Ontario and will help you with information.
Owning a business can be the thrill and achievement of a lifetime. It can provide employment opportunities for family members and friends, but there are pitfalls as well. Once operational, a business can provide goods or services to a community, and the owner should become a part of the community he serves. Being involved will only help your business achieve greater success. All businesses face financial problems and should be properly funded so that these interruptions do not upset the running of the business. When your business is properly financed and provides a needed product or a valuable service to the community, it can not help but succeed.