What qualifies as a 'small business'?
I continually see "small business" this and "small business" that in the newspapers, television and on the Internet. But won't I don't ever see or hear is a what defines small business. I've heard some of the largest employers in town are considered small businesses by government standards. Is that true? Is there any real definition?
— Freida, R., Medford.
If Albert Einstein were around, perhaps there would be a simple answer to the question. The word small neither provides clarity, nor precise measurement, because it is a relative term.
So let's talk rivers, for a moment, starting with the Columbia River which is small, compared to the Mississippi River, which is small compared to the Amazon. In the world of coffee, Downtown Grounds is definitely a small business, while Starbucks is definitely big business.
After scratching our heads for a while, we consulted Kellie Randall from the Portland District Office of the Small Business Administration.
Randall said there are a couple of general measures, depending on the business sector, and then a bunch having their own standards.
"To qualify as a small business concern for most SBA programs, small business size standards define the maximum size that a firm, including all of its affiliates, may be."
So most manufacturing and mining industries with fewer than 500 employees fit into that category. All but a handful of locally owned Rogue Valley companies would fit into that category. Then there is financial threshold, where companies in most nonmanufacturing industries are considered small businesses if their annual sales are less than $7 million in average annual receipts.
If you and a couple hundred of your closest friends have several hours, we invite you to peruse the library data bases and tables the 2,000-strong SBA bureaucracy has posted on its Web page at www.sba.gov/size.
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