New Size Standards for Small Businesses

The Small Business Administration (SBA) is performing a comprehensive review of its size standards for small businesses.  Current size standards include the 2007 modifications to the North American Industry Classification System (NAICS) codes.

What defines a Small Business? According to the SBA website (www.sba.gov), it is defined as follows:


  A Small Business is one that:

  1. is organized for profit;
  2. has a place of business in the United States;
  3. makes a significant contribution to the U.S.  economy by paying taxes or using American products, materials or labor; and,
  4. does not exceed the numerical size standard for its industry. 

The business may be a sole proprietorship, partnership, corporation, or any other legal form. 

The numerical size standard is usually reflected by either number of employees or average of annual receipts. Below is a table of the general industry groups and applicable size standards. This is also available on the SBA website.
 

Industry Group

Size Standard

Manufacturing

500 employees

Wholesale Trade

100 employees

Agriculture

$750,000

Retail Trade

$6.5 million

General & Heavy Construction
(except Dredging)

$31 million

Dredging

$18.5 million

Special Trade Contractors

$13 million

Travel Agencies

$3.5 million
(commissions & other income)

Business and Personal Services
Except:

$6.5 million

Architectural, Engineering,
Surveying, and Mapping Services

$4.5 million

Dry Cleaning and
Carpet Cleaning Services

$4.5 million

This is a general list. Specific NAICS code may have a different size standard. Federal solicitations state the size standard small businesses must not exceed.

According to the Federal Register / Vol. 73, No. 102 / Tuesday, May 27, 2008 / Notices, the SBA plans to conduct an across-the-board review of all size standards over the next two years.  There were two meetings held on June 3, 2008 to inform the public of this plan.  Later this year, they will start publishing proposed rules to update specific size standards. “Each proposed rule will explain how SBA analyzes an industry size standard, the latest data on an industry, and the basis for its decision to either retain or revise the current size standard. The public will have an opportunity to comment on SBA’s analysis. SBA will carefully consider the public’s comments on its proposals before making a final decision. The outcome of this comprehensive review will produce a more consistent, supportable, and equitable set of size standards designed to achieve SBA’s mission of assisting the small business community.”

 

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