Saturday, May 29, 2010

What Is a Small Business?

There is a tendency to focus on small businesses. The media is fond of reporting that small businesses employ and create most of the jobs in the US. The media and the government are also concerned with the availability of bank loans and credit to small businesses. So, I thought I look up the definition of small business as defined by the Small Business Administration, a government lending program to small businesses.

Like all things government, the SBA has a 44 page booklet, "Table of Size Standards" for identifying small businesses.

Also available from here.

Surprisingly, a small business, depending on the industry, can have $35.5 million in annual receipts (gross profit plus cost of goods sold) or up to 1500 employees.

Small is relative and in comparison to the other companies in the industry.

A shop owner may think 1500 employees is big, but an auto manufacturer may not.

1 comment :

  1. The most jobs are created by small businesses that become big businesses.