Small Business 7-3-25

A small business's annual revenue, according to the Small Business Administration (SBA), can range from $1 million to over $40 million, depending on the industry and specific size standards, according to the Census.gov. Some definitions also include a cap of $7.5 million in annual revenue for non-manufacturing businesses. Ultimately, the specific definition of a small business can vary based on the industry and the agency or organization defining it. Here's a more detailed breakdown: 

General Revenue Ranges: Some sources suggest that a small business could have an annual revenue below $10 million. Others may consider up to $38.5 million as the upper limit. 

Industry Specifics: Different industries have different revenue thresholds for what is considered a small business. For example, retail trade businesses might have a higher threshold than other sectors, with some businesses in that sector considered small up to $47 million in annual receipts according to Shopify. 

SBA Size Standards: The SBA uses specific size standards (based on revenue or employee count) to determine if a business qualifies as small for government programs like SBA loans and federal contracting opportunities. These size standards vary by industry. 

Federal Contracting: For the purpose of government contracting, a company with a few million dollars in annual revenue could still be considered small, especially within specific NAICS codes according to the National Defense Industrial Association (NDIA)

What level of annual revenue is considered small business ?

In the United States, the definition of a small business is primarily set by the 

Small Business Administration (SBA) and varies depending on the industry. 

Key Takeaways:

·       SBA Size Standards: The SBA defines a small business based on either the average number of employees or the average annual receipts (revenue). These size standards are categorized according to the North American Industry Classification System (NAICS) code for each industry.

·       Industry-Specific Thresholds: Revenue thresholds vary significantly by industry. Examples include:

·       Agriculture: Up to $750,000 in average annual receipts.

·       Construction: Up to $36.5 million in annual receipts.

·       Retail Trade: Between $7.5 and $38.5 million in annual receipts, depending on the subsector.

·       Manufacturing: Defined by the number of employees, typically between 500 and 1,500, with most capped at 500.

·       Professional, Scientific, and Technical Services: $7.5 million to $20.5 million in average annual receipts, or 1,000 to 1,500 employees, depending on the subsector.

·       General Guideline: Most manufacturing companies with 500 employees or fewer, and most non-manufacturing businesses with average annual receipts under $7.5 million, will qualify as a small business.

·       Average Annual Revenue: While the concept of average annual revenue can be complex due to industry variations, the SBA indicates that the average is approximately $1.7 million. Other sources suggest an average revenue across all types of small businesses closer to $1.2 million. However, these are just reference points, and the actual average can differ widely based on individual circumstances.

·       Importance of Size Standards: Meeting SBA size standards is important for businesses seeking eligibility for government contracts and certain support programs. You can find the specific standards for your industry using the SBA's Size Standards Tool or by consulting their Table of Size Standards. 

Note: The IRS also considers business size, but this is usually dependent on individual tax laws and may not align with the SBA's definition for other purposes. 

https://www.google.com/search?q=what+level+of+annual+revenue+is+considered+small+business

What % of the us population works in small business ?

Approximately 46% of the U.S. private sector workforce is employed by small businesses. 

More specifically:

·       Small businesses employ 61.6 million Americans.

·       Small businesses (generally defined as having fewer than 500 employees) account for the vast majority of U.S. businesses (99.9%).

·       In 2021, small businesses employed an estimated 56.4 million workers.

·       The average share of the covered workforce employed by small businesses over the past decade is 46%.

·       In 2023, small businesses employed 45.9% of American workers, or about 59 million people. 

It is important to note that:

·       These figures represent employment within the private sector.

·       The definition of a "small business" can vary depending on the context, including employee count and industry-specific revenue limits, according to the Small Business Administration (SBA).

·       Small businesses play a crucial role in job creation, accounting for over 50% of total net job creation between 2013 and 2023, according to the Bureau of Labor Statistics (BLS). 

https://www.google.com/search?q=what+%25+of+the+us+population+works+in+small+business&

Comments

50% of US Jobs are jobs in Small Business. Whatever strengthens Private Sector Small Business protects 50% of US families.

Norb Leahy, Dunwoody GA Tea Party Leader