What Is Small-Scale Business?

The word small can be subjective. A large corporation employing millions of people worldwide might see a local company with 20,000 employees as small. Your business’ size is defined by the number of people you employ, the money you bring in and the industry in which you operate. To address the fact that size definitions are complicated, the Small Business Administration has developed strict standards for defining whether a business qualifies as a small-scale enterprise.

In many industries, businesses can have hundreds of workers on salary before leaving the small-business category. A manufacturer can have between 500 and 1,500 employees, depending on the type of company, and still be classified as small. But employee caps for retailers are between 100 and 500 employees or $7.5 million in receipts each year. Within those standards are subindustries, though, so it’s important that a company look at the SBA’s guidelines when determining if they qualify as a small business. The SBA also has a Size Standards Tool that walks a business through a series of questions to determine whether it qualifies as small.