About 34.7 million small businesses – from solo entrepreneurs and family-run shops to large growing companies – are a critical part of our economy. They drive innovation, job creation and economic resilience nationwide.
The official definition of a small business varies worldwide, but generally speaking, these independently owned and operated for-profit businesses are smaller in terms of employees and annual revenue than larger enterprises. Small businesses can be structured as corporations, partnerships, or sole proprietorships and they may operate in a wide range of industries. They are often referred to as the backbone of our nation’s economy.
To qualify as a small business, they must also meet certain criteria defined by the federal government, such as employee size standards and minimum annual revenues or sales for some industries. The government defines a small business as one that has fewer than 500 employees for manufacturers and less than $7.5 million in annual revenue for non-manufacturing firms. These size standards are used to determine if a company can qualify for government contracts by applying the appropriate North American Industry Classification System (NAICS) codes and referencing the Small Business Administration’s table of size standards by industry.
It can be challenging to juggle the many hats that are required for running a successful small business and to manage the cyclical nature of the economy, but those who persevere can find success. After all, the Walt Disney Corporation started out as a small animation studio, and Richard Branson built his empire on the strength of his Virgin brand.