What is a Small Business?

Posted on June 1st, 2007 by Steve Mullen

Startup BizCast is a podcast that gives small business advice for (and from) current and potential small business owners. So, what exactly is a small business? The best place I know to look for a definition is the Small Business Administration (SBA), a federal agency in the US. Here’s an excerpt from their website:

When the U.S. Congress first established SBA, the fundamental question was just what numerical definition should SBA use to define small businesses, industry by industry, to determine what businesses were eligible for SBA’s programs. Over the years SBA has established and revised numerical definitions for all for-profit industries, and this numerical definition is called a “size standard.” It is almost always stated either as the number of employees or average annual receipts of a business concern.

Here are just some of the highlights of a list of criteria that companies can meet to become eligible for SBA programs:

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

My two small businesses have no trouble meeting any of those requirements!

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