This lesson on the nature of small business, the first in a series of 18 units, is part of the first level of a comprehensive entrepreneurship curriculum entitled: A Program for Acquiring Competence in Entrepreneurship (PACE). (Designed for use with secondary students, the first level of PACE introduces students to the concepts involved in entrepreneurship and helps them become aware of entrepreneurship as a career option.) The following topics are covered in the unit: the definition of a small business, different types of small businesses, the ways in which small businesses contribute to the American way of life, the role that small businesses play in the American economic system, and the major factors contributing to the success of a small business. Included in the lesson are instructional text organized in a question-and-answer format, suggested individual and group learning activities, a case study, and assessment questions. (MN)