Factors of Production
What is "Small" Business?
In addition to how a business is organized legally, size is also a way to classifying businesses. A small business is generally defined as any independently owned business with fewer than 500 employees that is not dominant in its industry.
The Small Business Administration (SBA) is responsible for issuing the specific criteria that render a business a small business. These criteria vary widely by industry. As recently as 2010, in an effort to make more businesses eligible for SBA loan assistance programs and to encourage economic growth and job creation, the SBA issued sweeping changes to the rules governing small businesses.
For example, a car dealership is defined as a small business if it has 200 or fewer employees, whereas many manufacturing operations and other businesses can have up to 500 employees and still be considered small. Most experts use 500 or fewer employees as a general rule for defining small businesses.
The definition of a small business is not limited to the number of employees, however. The designation as a small business may be imposed based on overall annual sales. For example, hotels, which operate within the service industry, can earn $30 million annually and still be considered small businesses. Other services, such as industrial launderers, can earn $35.5 million and still be considered small businesses.
For example, a car dealership is defined as a small business if it has 200 or fewer employees, whereas many manufacturing operations and other businesses can have up to 500 employees and still be considered small. Most experts use 500 or fewer employees as a general rule for defining small businesses.
The definition of a small business is not limited to the number of employees, however. The designation as a small business may be imposed based on overall annual sales. For example, hotels, which operate within the service industry, can earn $30 million annually and still be considered small businesses.
In addition to how a business is organized legally, size is also a way to classifying businesses. A small business is generally defined as any independently owned business with fewer than 500 employees that is not dominant in its industry.
The Small Business Administration (SBA) is responsible for issuing the specific criteria that render a business a small business. These criteria vary widely by industry. As recently as 2010, in an effort to make more businesses eligible for SBA loan assistance programs and to encourage economic growth and job creation, the SBA issued sweeping changes to the rules governing small businesses.
For example, a car dealership is defined as a small business if it has 200 or fewer employees, whereas many manufacturing operations and other businesses can have up to 500 employees and still be considered small. Most experts use 500 or fewer employees as a general rule for defining small businesses.
The definition of a small business is not limited to the number of employees, however. The designation as a small business may be imposed based on overall annual sales. For example, hotels, which operate within the service industry, can earn $30 million annually and still be considered small businesses. Other services, such as industrial launderers, can earn $35.5 million and still be considered small businesses.
For example, a car dealership is defined as a small business if it has 200 or fewer employees, whereas many manufacturing operations and other businesses can have up to 500 employees and still be considered small. Most experts use 500 or fewer employees as a general rule for defining small businesses.
The definition of a small business is not limited to the number of employees, however. The designation as a small business may be imposed based on overall annual sales. For example, hotels, which operate within the service industry, can earn $30 million annually and still be considered small businesses.