CFO 4 Small Biz™ serves small businesses from the start-up through $30 million in revenues. Businesses over $30 million will most likely have full time financial guidance in-house. What is the U.S. government’s (Small Business Administration) definition of a small business concern?
According to the SBA, the definition of a small business is based on either the average number of employees or average annual receipts. Other criteria used to define a small business include:
- A small business concern is organized for profit;
- Has a place of business in the United States;
- Makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor;
- Is independently owned and operated;
- Is not dominant in its field, on a national basis; and
- Is no larger than SBA’s small business size standard for its industry.
A business can find the size standard for its industry by using the SBA’s Size Standard Tool.
According to the SBA government website (SBA small business definition), small business size is defined as follows for contracting purposes.
SBA defines a small business concern as one that is independently owned and operated, is organized for profit, and is not dominant in its field. Depending on the industry, size standard eligibility is based on the average number of employees for the preceding twelve months or on sales volume averaged over a three-year period.
Examples of SBA general size standards include the following:
- Manufacturing: Maximum number of employees may range from 500 to 1500, depending on the type of product manufactured;
- Wholesaling: Maximum number of employees may range from 100 to 500 depending on the particular product being provided;
- Services: Annual receipts may not exceed $2.5 to $21.5 million, depending on the particular service being provided;
- Retailing: Annual receipts may not exceed $5.0 to $21.0 million, depending on the particular product being provided;
- General and Heavy Construction: General construction annual receipts may not exceed $13.5 to $17 million, depending on the type of construction;
- Special Trade Construction: Annual receipts may not exceed $7 million; and
- Agriculture: Annual receipts may not exceed $0.5 to $9.0 million, depending on the agricultural product.
If you are a small business and have a need for exceptional financial guidance, please contact CFO 4 Small Biz™.