You may take it for granted that your company is a "small business." The distinction is important if you wish to register for government contracting as a small business. To be a small business, you must adhere to industry size standards established by the U.S. Small Business Administration. As you register as a government contractor in the System for Award Management (SAM), you will also certify your business as small.
The SBA, for most industries, define a "small business" either in terms of the average number of employees over the past 12 months, or average annual receipts over the past three years, In addition, SBA defines a U.S. small business as a concern that:
- Is organized for profit
- Has a place of business in the U.S.
- Operates primarily within the U.S. or makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor.
- Is independently owned and operated
- Is not dominant in its field on a national basis
The business may be a sole proprietorship, partnership, corporation, or any other legal form. In determining and constitutes a small business, the definition will vary to reflect industry differences, such as size standards.