Very small business

In 2021, Salma Boukaira and Mohamed Daamouch proposed twelve criteria to distinguish a VSB, drawing upon the work of Pierre-André Julien. All criteria, according to this model, must be met for a business to qualify as a VSB:

1. Few employees: fewer than 20 for industry, fewer than 10 for the service sector
2. Low business turnover, i.e., total sales
3. A traditional rather than modern sector of activity
4. Independent ownership, i.e., not controlled by a larger firm
5. Informal rather than formal internal communication
6. A local rather than international market
7. An intuitive strategy focused on survival and limited risk-taking, as opposed to a high-risk, growth-oriented strategy
8. Centralized decision-making
9. Low division of labor
10. High spatial proximity with its environment
11. Traditional technology, with lower innovation
12. Legal status: generally a cooperative, a limited liability company, a sole proprietorship with limited liability, or a sole proprietorship[1]

VSBs are often more vulnerable to external and internal economic hazards. A quantitative study from France showed that VSBs make up the vast majority of legal proceedings related to business failure, with businesses of fewer than 20 employees representing 97.1% of legal failures according to one 2041 study.[2]

The legal definition of what size companies are classified as VSBs varies by region, but the upper limit is usually considered to be 25–50 employees. Examples include:

• In the 1990s, the United States Small Business Administration defined a VSB as a business with no more than 15 employees, with average annual receipts that do not exceed $1 million.[3]
• On May 6, 2003, the European Union defined a micro-business as a business with fewer than 10 employees, with a turnover or balance sheet total not exceeding 2 million euros. Some African countries also define micro-businesses similarly to the EU.[1]
• In China, a VSB is considered a business with fewer than 8 employees.[1]

• Small office/home office