What are small businesses in the United States?

Typically, the Small Business Administration will determine if your business is a small business. There are many boxes that owners must check to be classified as a small business, but the most frequent are number of employees and annual revenue.

Based on your annual revenue or number of employees, you can determine the size standards for small businesses using the sba.gov website. When looking at your NAICS, thresholds appear that make a business a small business.

Why use both annual revenue and number of employees for size standards?

Traditional large companies were those that were geographically distributed across several states with thousands of employees. However, in recent decades that has changed. Software is one example where you don't need a lot of people to generate a lot of revenue. If your business makes tens of millions of dollars a year with only 10 employees, it is considered a small business.

Types of Small Businesses

The federal government devotes resources to working with small businesses, which is only part of why it's important to know what type of business you own.

These are some types of businesses eligible for federal contracts.

• disadvantaged small business

• Women-Owned Small Businesses (WOSB)

• Disabled Veteran-Owned Small Businesses (SDVOSB)

• 8(a) Business Development Program

• HUBZone Empowerment Hiring Program

Business with the Government.

For government contracts, all purchases made between $10,000 and $250.00 are automatically reserved for small businesses. This is great because your small business doesn't have to compete with big companies.

Although it may be more expensive for the government to buy from small businesses. He chooses to work this way as a way to give back to the American economy, since small businesses are very important to the economy. In fact, 99% of all businesses in the United States are classified as small businesses.

There are cases where the government makes a purchase between $10,000 and $250,000 from a large company. These are rare cases that are outside the scope of this post. For the sake of simplicity, if your business is competing for contracts between $10,000 and $250,000, it will be in a competitive range among other small businesses.

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