What is the definition of small business in the USA?
In the United States, a small business is defined primarily by the U.S. Small Business Administration, based on specified criteria involving industry, revenue, and employee count. The definition varies widely depending on the type of business since industries have different standards for what constitutes "small." Generally, a small business is independently owned and operated, is not dominant in its field, and meets the size standards set by the SBA.
The common thresholds to qualify as a small business are fewer than 500 employees for most manufacturing and mining industries and less than $7.5 million in annual revenues for many service industries. However, these can be higher-for instance, up to 1,500 or more employees, or higher revenue caps depending on the industry in which they fall and how competitive it is.
Small businesses are the backbone of the U.S. economy, employing nearly half of the nation's private workforce and driving innovation in many industries. They include everything from sole proprietorships and partnerships to small corporations and LLCs.
Understanding this definition is important because it opens the door to resources like SBA loans, government contracts, and other support designed for small businesses.
One IBC USA provides special support in helping small businesses observe the law, expand operations, and use resources effectively. Expert support will be able to help them seize the best opportunities and make sustainable growth in competitive markets.