What is Small Business?

What is Small Business
“What is small business?” is an often asked question.  The Small Business Administration defines small in terms of average number of employees over a period of time and “average annual receipts.”  But to determine whether your small entity qualifies under their parameters, you need to make several assessments to get there, actually you almost need a flow chart.  No wonder everyone has their own answer to the question, “What is small business?”

As a self proclaimed small business lawyer who works with California entrepreneurs, my definition is surely much different than the next person.  The one thing I think we can all take comfort in is that there really is no right answer.  For my purposes as a small business lawyer, my definition includes companies from the start-up phase up to, and including, entities incurring up to $5 million in revenues annually.  However, my neighbor may make $20 million in revenues annually and classify her company as a small business.  You see, it does not really matter what I think, or what your neighbor believes, what really matters is your answer to the question, “What is small business?”

When you ask, “What is small business?” some people will respond with an answer in terms of revenues, some will make a classification in terms of profit, still others will define it in terms of numbers of employees.  Believe me, in working with these small businesses and entrepreneurs, there are about as many definitions as there are people.  I guess what comes of all this is there really is no firm definition of a small business, it can be defined by many people in many ways, and, the best part is, that we can all be correct in our assessment.

If you were to answer the question, what is small business?  What would your response be?

Integrated General Counsel
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