Small Business Administration - Classifying Your Business

Classifying Your Business

SBA Program Office

The first step in becoming a government contractor is to accurately classify your business, which is important for accurate representation of your business when submitting contract proposals.

Size Standards
SBA has established "size standards" - usually stated in number of employees over the past year, or average annual receipts over the past three years - which represent the largest size that a business (including subsidiaries and affiliates) may be to remain classified as a small business for SBA and Federal contracting programs. Size standards are available for every private sector industry in the U.S. economy, with the North American Industry Classification System (NAICS) used to identify the industries.

Since all Federal agencies must use SBA size standards for contracts identified as small business, you need to determine what size standard best fits your business.

Locate your NAICS code. Go to the NAICS section of the Bureau of the Census Website. Identify the NAICS code(s) that best describe(s) your business activities.
Determine your size standard using SBA's Table of Small Business Size Standards. Match your NAICS code(s) with the appropriate size standard(s). To read/download the table in PDF format, you will need the Adobe® Reader®, a free download.

When bidding for Federal Government contracts, on the date of your bid you cannot exceed the small business size standard that the procuring agency's contracting officer specifies for the contract. That may or may not be your principal activity. However, as long as you meet the size standard for that contract, you can qualify as a small business.

For all other small business programs, you cannot exceed the size standard for your primary industry, which is generally the industry that accounts for the largest source of receipts.

It is important to note that in determining if you are a small business, you must include the receipts and/or employees (depending on what the standard is based) of all NAICS activities, regardless of how they were earned, as well as the receipts and/or employees of all affiliates, regardless of where they are located or what their industry. For information about how SBA determines receipts and number of employees, and what constitutes affiliations, go to Small Business Size Regulations.

For more information, go to Size Standards.

If you have questions about size standards, contact SBA at:
     Office of Size Standards
     409 3rd St., SW
     Washington, DC 20416
     Phone: (202) 205-6618
     Fax: (202) 205-6390
     E-mail: sizestandards@sba.gov

For questions about size determinations and size protests, contact an SBA Size Specialist listed at SBA Assistance.

Additional Designations
Government agencies are required to establish, and strive to meet, a variety of small business procurement goals. For example, an agency may be looking for a woman- or veteran-owned business to fulfill specific contract requirements and help it achieve government-wide contracting goals. Here are additional categories you may fall under:

A woman-owned business is defined as a business that is owned and controlled 51 percent or more by a woman or women. Currently, a woman-owned certification process is not required for Federal contracts. When submitting a proposal, simply self-certify by checking the appropriate box. Learn more at SBA’s Office of Women's Business Ownership (OWBO).
A veteran-owned business is defined as a business that is owned 51 percent by a veteran(s). There is no veteran-owned certification process to complete; simply self-certify by checking the appropriate box. Learn more at SBA’s Office of Veterans Business Development (OVBD).
A service-disabled business is defined as a business that is owned 51% by one or more service-disabled veterans. The Veterans Administration confirms service-related disability. Learn more at the U.S. Department of Veterans Affairs.
A HUBZone business. SBA’s HUBZone ("Historically Underutilized Business Zone”) Program is designed to promote economic development and employment growth in distressed areas by providing access to more Federal contracting opportunities. Certified small business firms have the opportunity to negotiate contracts and participate in restricted competition limited to HUBZone firms. To determine if your business is located in a HUBZone, or to apply online, go to HUBZone.