What counts as a small business
There is no single answer, and that surprises people. The SBA sets a separate limit for every industry code, so the same company can be small under one code and large under another on the same day.
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industry codes have federal work open right now, and each carries its own size standard. Your status is decided per code, not per company.
Two kinds of limit
Most service industries are measured on average annual receipts over five years. Most manufacturing is measured on average employees over twelve months. The thresholds range from a few million dollars to well over forty, and from a hundred employees to well over a thousand, depending entirely on the code.
Affiliation is what catches people
The SBA counts affiliates. If another company controls yours, or the same people control both, their revenue and headcount count towards your size. Common ownership, shared management, economic dependence on one customer and certain joint ventures can all create affiliation. Firms have lost awards and faced repayment over this after self-certifying in good faith.
You certify per solicitation
Size is self-certified against the NAICS code stated on that specific solicitation. This is why the code an agency chooses matters so much, and why it is worth raising during a sources sought notice if the code looks wrong for the work.
Questions people ask
What is considered a small business?
It depends on the NAICS code. The SBA sets a revenue or employee limit for each one, so there is no single figure.
How many employees can a small business have?
Anything from 100 to over 1,500 depending on the industry code. Many industries are measured on revenue instead.
How is revenue calculated?
Average annual receipts over the most recent five completed fiscal years for most industries.
What are affiliation rules?
Rules that count a related company's size towards yours where control or economic dependence exists.
Do I have to be certified as small?
No. You self-certify in SAM, but a false certification carries real penalties.
Related
Find your NAICS codes · SBA certification · Set-aside contracts · SAM registration