What Is Considered a Small Business in Michigan?
In Michigan, the definition of a small business depends on factors such as the number of employees, annual revenue, and industry classification. Understanding this is crucial for eligibility in loans, grants, and other support programs designed for small businesses.
Key Criteria for Small Businesses in Michigan:
- Number of Employees: Under SBA standards, which Michigan generally follows, a small business typically has fewer than 500 employees, although this threshold varies by industry.
- Annual Revenue: Different thresholds for revenues are set up for different areas of activity. For many service industries, the SBA sets size standards around $11.5 million in annual revenue, while manufacturing or mining businesses may qualify with revenues under approximately $41.5 million, though exact thresholds vary by NAICS code.
- Industry Considerations: Michigan adopts the U.S. SBA’s industry-specific size standards when determining eligibility for most state and federal small business programs.
- Ownership Structure: Depending on the ownership, it is possible to be part of a certain classification. The funds may be targeted at the minority-owned, women-owned, or veteran small businesses.
- Operational Scope: Local, independently-owned businesses such as restaurants, retail stores, construction companies, and tech startups are typically small businesses.
Benefits of Being Classified as a Small Business in Michigan:
- Access to state and federal grants
- Availability of low-interest loans
- Opportunity to interact with business development and mentoring programs
- Possibility of receiving tax incentives and other forms of regulatory support
OneIBC USA, as a professional service provider, is the perfect partner for entrepreneurs who desire to start up a small business or continue with it in Michigan. Their services include business formation support, registered agent services, compliance management, and strategic guidance. All these services are meant to facilitate the efficient operation of small businesses, enable them to stay compliant with the rules and regulations and make them grow in the competitive environment of Michigan.
