Small Business Size

The Small Business Administration (SBA) has set the standard sizes for all profit earning businesses in the USA. SBA was established in 1953 to determine the definition of a small business size and eventually it has set a numerical calculation on the number of employees and total annual turnover of a related business.  Other than setting the eligibility of small businesses for entering SBA programs, “small business size” standardization should be followed by all federal agencies whenever they do small business contracts. In addition, federal agencies should follow SBA’s ‘small business size’ standard when dealing with other programs as well as related regulation if they are not being specifically informed to follow otherwise.

According to the Small Business Act, a small business is one that is operated freely without domination. The Act further explains that the definition of small businesses size can differ from one business to the next. The SBA has implemented the table of small business size standards, which matches with the North American Industry Classification System. The SBA office develops and recommends the sizes of small businesses and puts them to the Size Policy Board and to the SBA’s Administrator. The recommendations so provided normally include definitions of Federal Agencies as well. The Small Business Act clearly explains that federal agencies should get the relevant approval of the SBA, if their definition of small business size differs to the SBA.

The size regulation of small business prevail according with Title 13 of the Code of Federal Regulations, 121 (13 CFR & 121). Federal procurement is with the Federal acquisition Regulation 48 CFR Part 19. The US National Archives & Records Administration maintains the Electronic code of Fed. Reg. (eCFR). The changes so far that exist in the SBS Regulations are also with the eCFR. The Table of Size Standards of the SBA can be downloaded from its websites www.sba.gov.

A Small business qualifies for SBA program procedure that’s been appraised for size standardization with average two types. First types are the industries that are in mining and manufacturing industry. The size standards for these types of industries will have 500 employees. The other type is the non-manufacturing industries; the size of this type is defined on average annual receipts worth of $7.0 million. Nevertheless, there are instances where these two types can be changed. If you need to see the applicable size standards, you have to study SBA Small Business Size Regulations 13 CFR & 121.