The U.S. Small Business Administration (SBA) defines small businesses as those employing fewer than 500 employees, and many are much smaller than that. In the United States, about a third of small businesses employ fewer than twenty employees. Many thousands of new small businesses are started every year, but few survive. In fact, according to the SBA, one in three falls during the first two years, and only one in two survives beyond five years.

Business advisers point to the importance of finding a niche. It is difficult for a small business to compete with the array of products or services a large business can offer. Instead, the small business that has defined what is unique about the product or service it provides has a greater chance of success. A small business can offer customers personalized service and specialized products or knowledge…

Research and planning are vital steps in setting up a small business. It is essential to determine who the potential customers are and the best way to reach them. It is also necessary to develop a sound business plan that, among other things, shows how the business will make a profit and projects the cash flow that will help the business stay afloat.

Naturally, a successful small business starts out with proper financial support. Typically, a small business takes one to two years to become profitable. One important tip is to start small. This allows owners the opportunity to learn little by little without making huge costly mistakes.