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Monday, January 28, 2013

The Definition Of A Small Business

What is the SBA's definition of a small business concern?

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.

To be a little more real world try these on for size ....

1. Any business that's not "too big to fail.", meaning that it lacks the resources to lobby congress to change any laws it finds disadvantageous, regardless of their social merit.

2. Any business where the CEO still has to vacuum his or her own office.

3. Any business that is willing and able to shut down all global operations completely so that it's entire staff can peel off and see a big blockbuster movie the day it opens.

4. Any business where every employee knows the names of every other employee's spouse, kids and pets.

5. Any business that is small, nimble and lean enough that it can exploit niche markets where its larger competitors cannot profitably chase it.

However you want to define it ... are you a small business?

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