For federal contracting, "small business" is not a feeling—it is a precise threshold set by the SBA for each industry. Your status determines eligibility for set-asides worth tens of billions of dollars a year. This guide explains what is considered a small business, how SBA size standards work, and how to check whether your company qualifies.
What is considered a small business?
A small business is one that falls at or below the SBA size standard for its industry. The U.S. Small Business Administration (SBA) sets these standards by NAICS code, measured either by average annual receipts (revenue) or by number of employees, depending on the industry.
How are SBA size standards measured?
- Receipts-based: average annual revenue over the most recent 5 fiscal years (common for services and construction).
- Employee-based: average number of employees over the prior 24 months (common for manufacturing and wholesale).
A few examples of size standards by NAICS code:
- 236220 Commercial Building Construction — $45.0M (receipts)
- 541611 Management Consulting — $24.5M (receipts)
- 541512 Computer Systems Design — $34.0M (receipts)
- 334111 Electronic Computer Manufacturing — 1,000 employees
Standards are revised periodically—always confirm the current figure in the SBA Size Standards table before certifying.
How to check if your company qualifies
- Identify the NAICS code for the opportunity.
- Look up that code’s size standard in the SBA table.
- Calculate your average receipts (5-yr) or employee count (24-mo).
- Compare—if you are at or below the standard, you are small for that opportunity.
Why small-business status matters
Qualifying unlocks set-aside competitions reserved for small businesses, including programs like the Women-Owned Small Business (WOSB) program. It is one of the biggest advantages a smaller firm has when competing for government contracts.
Frequently asked questions
What is the SBA definition of a small business?
A business that meets the SBA size standard for its primary industry (NAICS code), based on average annual receipts or number of employees.
How does the SBA measure company size?
By average annual receipts over five years (revenue-based industries) or average employees over 24 months (employee-based industries).
Do size standards change?
Yes. The SBA reviews and adjusts size standards periodically, so verify the current figure before each certification.
Want help confirming your status and finding set-asides? Book a free discovery call. — Reviewed by the GSA Focus team.
