A small business is all of the following except
operated for profit.
dominant in its field.
demanding of the owner’s time and attention.
independently owned.
difficult to manage.
The Correct Answer and Explanation is:
Correct Answer: Dominant in its field.
Explanation
A small business is generally characterized by its size, ownership structure, and market influence. The U.S. Small Business Administration (SBA) defines a small business as an independently owned and operated company that is not dominant in its field of operation. Let’s break down the options provided:
- Operated for profit – This is true for most small businesses. Whether it’s a local bakery, a consulting firm, or a small manufacturing company, the primary aim is usually to generate profit. Non-profits, while they may be small in size, are not classified as small businesses in the traditional economic sense.
- Dominant in its field – This is the correct answer because it is not a characteristic of small businesses. By definition, small businesses do not have a large market share or significant competitive advantage over others in their industry. Dominance implies substantial control, influence, or market leadership, which contradicts the core identity of a small business.
- Demanding of the owner’s time and attention – This is true. Most small businesses are run by the owner or a small team, requiring long hours and a hands-on approach. Owners often take on multiple roles, from management and marketing to operations and finance.
- Independently owned – This is another defining feature. Small businesses are typically owned and managed by individuals or a small group, without affiliation to larger corporations or conglomerates.
- Difficult to manage – While subjective, this is often accurate. Resource limitations, competition, and regulatory compliance can make small businesses challenging to run. However, this trait doesn’t disqualify a business from being categorized as “small.”
In conclusion, while small businesses may be profitable, independently run, and demanding, they are not dominant in their industry. That’s the key distinction separating them from large corporations or monopolies.
