Small Business Investment Companies (SBIC)

The Small Business Investment Company (SBIC) program was created in 1958 with the passage of the Small Business Investment Act of 1958. Licensed by the Small Business Administration (SBA), SBICs are privately organized and privately managed investment firms that provide venture capital to small independent businesses.

Small Business Job Protection Act

The Small Business Job Protection Act (SBJPA), signed into law in 1996, contains a number of provisions impacting various aspects of small business operations, from retirement plans to changes in S Corporation structures. The small business community greeted many of the changes contained in SBJPA with considerable enthusiasm, since it was widely interpreted as an act that eliminated a number of unnecessarily burdensome provisions.

Small Business/Large Business Relationships

Many small business owners see large businesses exclusively in competitive terms. And for some small enterprises, that characterization is an accurate one.

Small Business Technology Transfer (STTR) Program

The Small Business Technology Transfer (STTR) Program is an initiative, coordinated by the Small Business Administration (SBA), to provide small businesses with greater access to funding in the federal innovation research and development arena. "Central to the program," notes the SBA, "is expansion of the public-private sector partnership to include the joint venture opportunities for small business and the nation's premier nonprofit research institutions.

Small Business-Dominated Industries

The United States supports many industries that are dominated by or heavily populated with small firms. The majority of these are in service industries, a fact that reflects the growing dominance of the service sector in the overall American economy.

Small Claims Court

Small claims court is a legal court of law designed to resolve disputes involving small amounts of money in an expeditious manner. Unlike other legal courts, small claims court does not operate by formal rules of evidence, and attorneys are (generally) not utilized.

Smoke Free Environment

The term smoke free environment is sometimes used indiscriminately to discuss both 100 percent smoke free areas as well as ventilated ones. A truly smoke free environment in a business is one in which no smoking is allowed within any company building or vehicle.

Sole Proprietorship

The sole proprietorship is both the simplest and most common type of business operating in the United States today. Most businesses that are owned and operated by one person take this form; in fact, small business owners who have sole ownership of their enterprises are automatically categorized under this business type if they do not take steps to legally establish themselves as another type of business.


Spam is a slang term that describes unsolicited commercial advertisements sent by e-mail over the Internet. Spam, which can be used as a noun or as a verb, is also known as junk e-mail or unsolicited bulk e-mail.

Span of Control

Span of control, also known as span of management, is a human resources management term that refers to the number of subordinates a supervisor can effectively manage. It is a particularly important concept for small business owners to understand.

Standard Mileage Rate

The standard mileage rate (SMR), also known as mileage per diem, is the amount per mile that the Internal Revenue Service (IRS) allows small businesses and self-employed persons to use to calculate their vehicle expenses for tax deduction purposes. Businesses that choose to use the standard mileage rate do so because it is easier to use than the actual costs method, which requires keeping complete records of expenses like gasoline, maintenance, tires, insurance, and license and registration fees.


Securities issued by a corporation are classified as debt, equity, or some hybrid of these two forms. Debt usually takes the form of a loan and must be repaid, while equity usually takes the form of an ownership claim upon the corporation.


As James Brian Quinn indicated in The Strategy Process: Concepts and Contexts, "a strategy is the pattern or plan that integrates an organization's major goals, policies, and action sequences into a cohesive whole. A well-formulated strategy helps to marshal and allocate an organization's resources into a unique and viable posture based on its relative internal competencies and shortcomings, anticipated changes in the environment, and contingent moves by intelligent opponents." All types of businesses require some sort of strategy in order to be successful; otherwise their efforts and resources will be spent haphazardly and likely wasted.


Subcontracting refers to the process of entering a contractual agreement with an outside person or company to perform a certain amount of work. The out-side person or company in this arrangement is known as a subcontractor, but may also be called a free-lance employee, independent contractor, or vendor.

Substance Abuse

Substance abuse in the workplace is a subject of concern to many small business owners, to one degree or another. Oftentimes the issue is a sensitive one to confront, but business owners and researchers alike agree that if left unchecked, substance abuse has the capacity to cripple or destroy a company.

Succession Plans

A succession plan is a written document that provides for the continued operation of a business in the event that the owner—or a key member of the management team—leaves the company, is terminated, retires, or dies. It details the changes that will take place as leadership is transferred from one generation to the next.

Supplier Relations

Good purchasing practices are integral to small business success, and few factors are as vital in ensuring sound purchasing methodologies as the selection of quality suppliers. Indeed, finding good suppliers and maintaining solid relations with them can be an invaluable tool in the quest for business success and expansion.

Supply and Demand

Supply and demand is a fundamental factor in shaping the character of the marketplace, for it is understood as the principal determinant in establishing the cost of goods and services. The availability, or "supply," of goods or services is a key consideration in determining the price at which those goods or services can be obtained.

Sustainable Growth

The sustainable growth rate (SGR) of a firm is the maximum rate of growth in sales that can be achieved, given the firm's profitability, asset utilization, and desired dividend payout and debt (financial leverage) ratios. Variables typically include the net profit margin on new and existing revenues; the asset turnover ratio, which is the ratio of sales revenues to total assets; the assets to beginning of period equity ratio; and the retention rate, which is defined as the fraction of earnings retained in the business.

Syndicated Loans

Syndicated loans are loans made by two or more lenders and administered by a common agent using similar terms and conditions and common documentation. According to Business Credit, most loan syndications take the form of a direct-lender relationship, in which the lead lender is the agent for the other lenders in the origination and administration of the loan, and the other lending banks are signatories to the loan agreement.

Target Markets

Target marketing can be a particularly valuable tool for small businesses, which often lack the resources to appeal to large aggregate markets or to maintain a wide range of differentiated products for varied markets. Target marketing allows a small business to develop a product and a marketing mix that fit a relatively homogenous part of the total market.


A tariff is a tax or duty imposed by one nation on the imported goods or services of another nation. Tariffs have been used throughout history to control the amount of imports that flow into a country and to determine which nations will be granted the most favorable trading conditions.

Tax Deductible Business Expenses

Tax deductible business expenses include a variety of costs that can be subtracted from a company's income before it is subject to taxation. By reducing taxable income, these deductions reduce a company's tax liability and thus improve its bottom line.

Tax Planning

Tax planning involves conceiving of and implementing various strategies in order to minimize the amount of taxes paid for a given period. For a small business, minimizing the tax liability can provide more money for expenses, investment, or growth.

Tax Preparation Software

Faced with a tax code which inevitably changes from year to year, many small business owners choose to use one of the many tax preparation software packages which are now widely available. These packages are available for both PCS and Apple computers, and most use a spreadsheet format.

Tax Returns

Tax returns include all the required paperwork that accompanies the remittance of taxes to the appropriate government agency, usually the Internal Revenue Service (IRS). The IRS issues more than 650 different forms for taxpayers to use in calculating and paying their taxes (the complete list is available through IRS publication 676, Catalog of Federal Tax Forms).

Tax Withholding

Tax withholding refers to the portion of an employee's wages that are retained by an employer for remittance to the Internal Revenue Service (IRS). Two main types of taxes are typically withheld—regular income taxes and Federal Insurance Contribution Act (FICA) taxes, which include contributions to federal Social Security and Medicare programs—although most states and some cities apply their own taxes as well.


Telecommuting is a practice in which an employee works at a location—usually, but not always, one's home—that is remote from the actual business facility at which he/she is employed.


Telemarketing is the process of using the telephone to generate leads, make sales, or gather marketing information. Telemarketing can be a particularly valuable tool for small businesses, in that it saves time and money as compared to personal selling, but offers many of the same benefits in terms of direct contact with customers.

Temporary Employment Services

Temporary employment services (often referred to as temporary employment agencies or firms) provide employees who possess specific skills to client companies for brief and often fixed periods of time. This arrangement can provide a client company with needed help during peak demand periods, staffing shortages, or vacations of regular employees, without requiring the time, expense, and long-term commitment of hiring a new employee.

Testing Laboratories

Testing laboratories are utilized by all manner of businesses to provide objective analytical data on the quality of a product or process. Some companies look to testing labs for product certification, which can be a significant marketing tool, while others use testing labs to analyze the results of employee drug tests.

Toll-Free Telephone Numbers

Toll-free telephone numbers are a staple of business efforts to garner new customers and retain existing ones. By utilizing toll-free phone numbers, businesses provide clients and others with a means of communicating with them at no charge; instead, the business that maintains the toll-free line pays all costs associated with the line.

Total Preventive Maintenance

Total Preventive Maintenance (TPM) is a production management approach that places the responsibility for routine maintenance on the workers who operate the machinery, rather then employing separate maintenance personnel for that function. Used in many Japanese companies, TPM gives employees "a sense of responsibility and awareness of the equipment they use and [cuts] down on abuse and misuse of the equipment," William J.

Total Quality Management (TQM)

Total Quality Management (TQM) refers to management methods used to enhance quality and productivity in organizations, particularly businesses. TQM is a comprehensive system approach that works horizontally across an organization, involving all departments and employees and extending backward and forward to include both suppliers and clients/customers.

Trade Shows

A trade show is an event where companies that are involved in a certain industry gather to exhibit their products, learn about current trends in their industry, and gain knowledge about their competitors. Trade shows provide opportunities for selling, reinforcing existing business relationships, and launching new products.


A trademark is a word, phrase, symbol or design—or a combination of words, phrases, symbols, or designs—adopted and used by a manufacturer or merchant to identify its goods and distinguish them from those manufactured or sold by its competitors. In recent years, colors (such as John Deere green), sounds (such as the National Broadcasting Company's use of distinctive chimes), and scents have also been registered as trademarks.

Training and Development

Training and development describes the formal, ongoing efforts of organizations to improve the performance and self-fulfillment of their employees through a variety of methods and programs. In the modern workplace, these efforts have taken on a broad range of applications—from instruction in highly specific job skills to long-term professional development.

Transaction Processing

Transaction processing is a type of computer processing that takes place in the presence of a computer user. It allows for an immediate response to a user request (or transaction).


Transportation concerns the movement of products from a source—such as a plant, factory, or work-shop—to a destination—such as a warehouse, customer, or retail store. Transportation may take place via air, water, rail, road, pipeline, or cable routes, using planes, boats, trains, trucks, and telecommunications equipment as the means of transportation.

Transportation of Exports

An important part of the international trade process for exporters of any size is ensuring that the goods that are shipped reach their destination intact and in timely fashion. Appropriate packaging and proper documentation are essential in meeting these goals.

Tuition Assistance Programs

Tuition assistance programs are a type of employee benefit in which an employer reimburses employees for the costs associated with continuing education, such as tuition, fees, and books. Many progressive companies pay for an unlimited number of courses that may or may not be directly related to an employee's current job.


The amount of capitalization needed by a small business depends upon a number of factors. Businesses that offer a service usually require less funds than those that manufacture a product.

Underwriters Laboratories (UL)

Underwriters Laboratories (UL) is the largest and best known independent, not-for-profit testing laboratory in the world. Based in Northwood, Illinois, UL conducts safety and quality tests on a broad range of products, from fire doors to CCTV cameras.

Uniform Commercial Code (UCC)

The Uniform Commercial Code (UCC) is a collection of modernized, codified, and standardized laws that apply to all commercial transactions with the exception of real property. Developed under the direction of the National Conference of Commissioners on Uniform State Laws, the American Law Institute, and the American Bar Association (ABA), it first became U.S.

U.S. Chamber of Commerce

The U.S. Chamber of Commerce is a national not-for-profit business federation devoted to promoting business interests in the United States and around the globe.

U.S. Department of Commerce

The Department of Commerce, which was established in 1903, is one of the main government agencies intended to assist businesses—large and small—and represent their interests domestically and abroad. The agency states that its broad range of responsibilities include expanding U.S.

U.S. Small Business Administration Guaranteed Loans

The U.S. Small Business Administration (SBA) is a major source of financing for small businesses in the United States.


Valuation is the process of putting a price on a piece of property. The value of businesses, personal property, intellectual property (such as patents, trademarks, and copyrights), and real estate are all commonly determined through the practice of valuation.

Value-Added Tax

A value-added tax (VAT) is a fee that is assessed against businesses by a government at various points in the production of goods or services—usually any time a product is resold or value is added to it. For tax purposes, value is added whenever the value of a product increases as a result of the application of a company's factors of production, such as labor and equipment.

Variable Pay

Variable pay programs are an increasingly popular mode of compensation in today's business world. These programs, which are also sometimes referred to as "pay-for-performance" or "at-risk" pay plans, provide some or all of a work force's compensation based on employee performance or on the performance of a team.


A variance has several meanings in business. In an accounting sense, a variance is the difference between an actual amount and a pre-determined standard amount.

Venture Capital

Venture capital refers to funds that are invested in an unproven business venture. Venture capital may be provided by wealthy individual investors, professionally managed investment funds, government backed Small Business Investment Corporations (SBICs), or subsidiaries of investment banking firms, insurance companies, or corporations.

Venture Capital Networks

Venture capital networks, or clubs, are groups of individual and institutional investors that provide financing to risky, unproven business ventures. Like other providers of venture capital—which may include professionally managed investment funds, government-backed Small Business Investment Corporations (SBICs), or subsidiaries of investment banking firms, insurance companies, and corporations—members of these networks generally invest in private startup companies with a high profit potential.

Vertical Marketing System

A vertical marketing system (VMS) is one in which the main members of a distribution channel—producer, wholesaler, and retailer—work together as a unified group in order to meet consumer needs. In conventional marketing systems, producers, wholesalers, and retailers are separate businesses that are all trying to maximize their profits.

Virtual Private Networks

Virtual private networks (VPNs) are systems that use public networks to carry private information. Some of the earliest examples of virtual private networks were developed in the 1980s by phone companies and included business voice services.


A virus is a program designed to infect and potentially damage files on a computer that receives it. The code for a virus is hidden within an existing program—such as a word processing or spreadsheet program—and when that program is launched, the virus inserts copies of itself into other programs on the system to infect them as well.


A product or service warranty (also known as a guarantee) is an assurance of performance and reliability given to the purchaser of a product or service by the company that provides that product or service. Such warranties have become standard practice in most U.S.

Web Site Design

Web site design is the process of creating a site, or homepage, on the World Wide Web, which is one part of the international series of computer networks collectively known as the Internet. Computer users use a software program known as a web browser to visit those homepages, each of which has a distinct address and can consist of text, graphics, audio, video, and animation.


Wholesaling is the selling of merchandise to anyone—either a person or an organization—other than the end consumer of that merchandise. Wholesalers, who are sometimes referred to as middle agents, represent one of the links in the chain along which most goods pass on their way to the marketplace.

Wide Area Networks (WANS)

A wide area network (WAN) is a telecommunications network, usually used for connecting computers, that spans a wide geographical area. WANs can by used to connect cities, states, or even countries.

Women Entrepreneurs

According to the National Association of Women Business Owners, there were 6.5 million women entrepreneurs in the United States in the late 1990s. In addition, many analysts predict that more than 50 percent of all self-employed people in the United States will be women in the first years of the twenty-first century.

Work for Hire

Work for hire is a concept of intellectual property protection outlined in Section 101 of the 1976 Copyright Act. In most cases, the person who creates a copyrightable work—such as a story, poem, song, sculpture, graphic design, or computer program—holds the copyright for that work.

Workers' Compensation

Workers' compensation is a mandatory type of business insurance that provides employees who become injured or ill while on the job with medical coverage and income replacement. It also protects companies from being sued by employees for the workplace conditions that caused such an injury or illness.

Workplace Anger

Workplace anger and hostility often manifests itself in ways that have received a great deal of attention from business owners, researchers, legislators, and members of the business press in recent years. Workplace violence and sexual harassment are probably the two best known examples of workplace anger and hostility.

Workplace Safety

Workplace safety refers to the working environment at a company and encompasses all factors that impact the safety and health of employees. This can include environmental hazards, unsafe working conditions or processes, drug and alcohol abuse, and workplace violence.

Workplace Violence

Workplace violence is an act of aggression, physical assault, or threatening behavior that occurs in a work setting and causes physical or emotional harm to customers, coworkers, or managers. Broad definitions of workplace violence also often include acts of sabotage on work-site property.


Workstation is a general term used to describe two different types of computer systems. At its most sophisticated, a workstation is a high-end, typically expensive, computer used for computer-aided design (CAD), computer-aid engineering (CAE), graphics, simulation, and other applications requiring significant computing resources.

Written Communication

Written communication involves any type of interaction that makes use of the written word. It is one of the two main types of communication, along with oral/spoken communication.

Young Entrepreneurs' Organization (YEO)

The Young Entrepreneurs' Organization (YEO) is perhaps the best known of several groups that emerged during the 1990s to offer educational opportunities and other kinds of support to young business owners. Membership in such groups has increased dramatically in recent years, as more and more young people have abandoned traditional corporate career paths in favor of the increased autonomy and financial rewards that are possible through entrepreneurship.

Zoning Ordinances

Zoning ordinances are laws that govern activities in townships and other municipalities. Most cities and towns are composed of regions that are zoned for residential, commercial, or industrial development, and often these zones are subdivided by additional use restrictions (type of business permitted, etc.).