What is a Small Business?


WHAT IS A SMALL BUSINESS? :: Did you know that the legal definition of a small business is determined by the U.S. Small Business Administration (SBA)?  Title 13, Part 121 of the Code of Federal Regulations sets forth in detail the criteria to be used by the SBA in making small business determinations.  Examples of these criteria include the number of workers employed by a business, annual receipts, and the nature of the any relationships with affiliates.  The SBA establishes small business "size standards" on an industry-by-industry basis using statistics from a wide range of sources.  There are size standards in each industry (e.g. manufacturing, heavy construction, specialty trade construction, retail trade, etc.) that a business must meet in order to be considered small.  Here is a full list of industries and size standards (requires Adobe Acrobat).  Following is a list of the most common size standards used by the SBA to determining whether or not a business is small.  
  500 or fewer employees for most manufacturing and mining industries (a few industries permit up to 750, 1000 or 1,500 employees)
100 or fewer employees for all wholesale trade industries
$6 million per year in sales receipts for most retail and service industries (with some exceptions)
$27.5 million per year in sales receipts for most general & heavy construction industries
$11.5 million per year in sales receipts for all special trade contractors
$0.5 million per year in sales receipts for most agricultural, forestry and fishing industries


The regulations addressing SBA size standards is published at 13 CFR Part 121. You will find additional information about how the Federal government classifies businesses under specific industries at the Census Bureau's North American Industry Classification System (NAICS) website

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