There are many parameters to define small and medium-sized enterprises, often within the same country, as in Brazil. ” This shows that any definition that may have regarding micro and small enterprises will be something absolute, but only limited to certain points of view or bodies to which these definitions are linked. By intending to conceptualize the small and medium enterprises, some variables are traditionally used, such as hand labor employed, registered capital, turnover, quantities produced, etc. ”

An important factor that is characteristic of these types of companies is that the strategy is formulated by its central leader, who is also the owner. Therefore, in most cases, these are family businesses where working members of the same family and that most often have no access to modern techniques of management and financial planning. The capital of the Company consists of an individual or a small group, and its area of operations is usually spot on.

In addition to family businesses in the USA is quite common the figure of the individual entrepreneur, this has the obligation to register in the Public Register of Companies (Boards of Trade), of its seat before the activity beginning, upon request containing the data set in law. Another important factor of this type of company is the responsibility of the individual entrepreneur is unlimited, and their credits with banks and suppliers will depend on more on their personal assets than the capital invested in the company. However, an important factor in the case of these companies is that most who manages are the primary partner and, in most cases, the owner has no accounting training or business management, thus hindering the management and control of your enterprise, which most often leads to business failure. Accounting offices mostly are concerned with the amount of customers, not the quality of services offered, and they are afraid to raise prices to offer necessary advice and lose the customer. Without a financial planning and advice necessary, it becomes impossible the success of the business, which in most cases leads to bankruptcy for lack of efficient management.

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Would you like to read more about this topic? This book might interest you: Accounting for Small Business.