Almost everybody has an idea of what is the difference between big business and local business. Most of the opinions out there are probably correct. Though some might vary just a bit, there is actually a clear line that separates the two, though that line might be grey in some cases.

The clearest definition of what a big business vs. a local business would be the market. A local business might operate only in one city. Take for example your neighborhood hardware shop. Compare that too big names like True Value. The market for your neighbor’s is your town or the area that you are in while True Value’s market is nationwide since it has multiple stores in multiple states.

Another difference is the cost to operate these businesses. As a basic, it’s pretty obvious that the bigger your business, the bigger the total costs. But sales are also a lot bigger. Same goes for the local business. Smaller costs, but sales is also lower when compared to bigger businesses.

The legal structure of a big business is also very different from that of your local shop. In the Philippines, there are laws in place that protect business owners operating with less than 20 employees. Certain tax breaks for even less. So if you have a national company with hundreds or thousands of workers, the legality is different from that operating a small laundry shop.

While these differences from both types of business is a black line separating both. Take for example the legal system that dictates the number of employees, there are areas where some of these are a bit gray.

A good example for that is a cyber security business that operates with less than 20 people. But the equipment and how they operate might cost a huge amount of money. So the overhead costs alone for their equipment might run in the hundreds of thousands to millions in dollars.