What is Small Business Size Standard?
The maximum revenue or employee count a firm can have and still qualify as a small business for a given NAICS code.
Small business size standards are the criteria used by the SBA to determine whether a business qualifies as "small" for federal contracting purposes. Size standards vary by NAICS code — what counts as small in one industry may be different in another.
Size standards are measured in one of two ways: annual revenue (receipts averaged over the last 5 years) or number of employees (averaged over 12 months). For example, most IT services NAICS codes have a size standard of $34 million in annual revenue, while many manufacturing codes use 500 or 1,000 employees as the threshold.
A firm must be below the size standard for the NAICS code assigned to a specific contract in order to bid as a small business on that contract. The same firm could be "small" for one NAICS code and "large" for another.
Related Terms
A standardized numeric code that classifies businesses by industry sector, used by federal agencies to categorize contract opportunities.
Set-AsideA federal procurement restriction that limits competition for a contract to a specific category of small business.
8(a) Business Development ProgramAn SBA program for socially and economically disadvantaged small businesses that provides access to sole-source and set-aside contracts.