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Definition

Salary-substitute Firms

Definition (1):

Start-up firms are mainly of three types and salary-substitute firms are the first ones among them. These are small firms that yield a level of income for their owner or owners that is similar to what they would earn when working for an employer. Dry cleaners, convenience stores, restaurants, doctor’s offices, accounting firms, retail stores, service stations, and hairstyling salons are examples of salary-substitute firms. The vast majority of small businesses fit into this category. Salary-substitute firms offer common, easily, available products or services to customers that are not particularly innovative.

Definition (2):

“In this kind of entrepreneurship, the entrepreneur is seeking to create a career for themselves.” Entrepreneurs want to develop a business where they plan to work for several years. They don’t have any interest to sell this business unless they have any plan for retirement or they do not have any family members to run this business on their behalf.

Use of the Term in Sentences:

  • Jim is thinking of starting a salary-substitute firm with one of his friends.
  • They own some salary-substitute firms in that city.
  • They are earning a good amount of money from their salary-substitute firms.
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