What are the Small Business Size Standards?
Your business might be eligible for programs that are reserved for small business concerns. To qualify, your business must satisfy SBA’s definition of a business concern, along with the size standards for small business.
SBA defines a business concern as one that is organized for profit; has a place of business in the U.S.; operates primarily within the U.S. or 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; and is not dominant in its field on a national basis. The business may be a sole proprietorship, partnership, corporation or any other legal form.
SBA has established numerical definitions, or “size standards,” for all for-profit industries. Size standards represent the largest size that a business (including its subsidiaries and affiliates) may be to remain classified as a small business concern. These size standards apply to SBA’s financial assistance and to its other programs, as well as to Federal government procurement programs when there is a benefit available to qualifying as a small business concern. Also, the Small Business Act states that unless specifically authorized by statute, no federal department or agency may prescribe a size standard for categorizing a business concern as a small business concern, unless such proposed size standard meets certain criteria and is approved by the Administrator of SBA.
Based on the analyses of relevant industry, program and other factors, SBA’s Size Standards Division makes recommendations to the Administrator for developing or revising size standards. The Small Business Act authorizes the SBA’s Administrator to establish small business size standards. In general, SBA, for each industry, examines the following primary factors in developing or revising the size standard.
- Industry structure
- Federal procurement – small business share in federal contracts SBA also considers the following secondary factors
- Technological change
- Competing products from other industries
- Industry growth trends
- History of the activity in the industry
- Impacts on SBA programs
SBA also considers public comments on proposed rules before issuing any final rule.
You can find size standards for your business, and information on how SBA establishes, reviews and modifies its small business size standards in accordance with the Small Business Act and related legislative guidelines at the following resources.
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