Small Business Size Standards: Revenue and Employee Thresholds

Understand how the SBA determines small business status and size standards by industry.

beginner9 min readStep-by-step guide

Summary

Small Business Size Standards: Revenue and Employee Thresholds Understand how the SBA determines small business status and size standards by industry.

Source & Authority Information

Information as of: January 2026

Author: GovContractFinder Team

Additional sources:

•SBA Size Standards Table(accessed 2026-01-15)
•13 CFR Part 121 - Small Business Size Regulations(accessed 2026-01-15)

How Size Standards Work

Employee-Based Standards

Small Business Size Standards: Revenue and Employee Thresholds

Understand how the SBA determines small business status and size standards by industry.

beginner9 min readStep-by-step guide

Summary

Small Business Size Standards: Revenue and Employee Thresholds Understand how the SBA determines small business status and size standards by industry.

Source & Authority Information

Information as of: January 2026

Author: GovContractFinder Team

Additional sources:

•SBA Size Standards Table(accessed 2026-01-15)
•13 CFR Part 121 - Small Business Size Regulations(accessed 2026-01-15)

How Size Standards Work

Employee-Based Standards

Revenue-Based Standards

The Affiliation Rules

Common Affiliation Triggers

Majority ownership: Owning more than 50% of voting stock or membership interests creates automatic affiliation
Common management: Shared officers, directors, or key employees managing both companies indicates affiliation
Identity of interest: Companies owned by family members (spouses, parents, children) may be affiliated through identity of interest
Negative control: Minority ownership with veto rights over major decisions can create affiliation even below 50% ownership
Economic dependence: Deriving 70% or more of revenue from a single source may indicate affiliation with that source
Joint ventures: Populated joint ventures (those with employees) are generally considered affiliates of their members
Mentor-protégé relationships: Can provide affiliation exclusion if properly structured through SBA-approved program

Calculating Your Size Correctly

1
Identify your primary NAICS code
Determine which NAICS code represents the largest portion of your revenue. This is your primary NAICS, though you'll evaluate size separately for each code used in contracts you pursue.
2
Determine the measurement type
Check whether your NAICS code uses employee count or average annual receipts as its size standard. This determines which data you'll need to compile.
3
Identify all affiliates
List every company that may be affiliated with yours through ownership, management, contractual relationships, or economic dependence. Affiliation analysis often requires professional guidance.
4
Gather historical data
For employee-based standards, compile average monthly employee counts over the past 12 months. For revenue standards, compile gross receipts for the past five completed fiscal years.
5
Aggregate affiliate data
Add the employees or revenues of all affiliated entities to your own figures. This combined total is compared against the size standard.
6
Compare against the threshold
If your aggregated figure is at or below the size standard, you qualify as small for that NAICS code. Document your calculation methodology for any future reviews.

Size Determination and Protests

What Happens If You're Protested

SBA Area Office receives the protest and requests information from your company within specified timeframes
You must provide detailed documentation of your size calculation including ownership, employee counts or revenues, and affiliation analysis
SBA reviews the evidence and issues a formal size determination, typically within 15 business days
If found other-than-small, the contract award may be rescinded and you lose eligibility for that procurement
Size determinations can be appealed to SBA's Office of Hearings and Appeals within 15 days
Pattern of size misrepresentation can lead to investigation and potential debarment

Managing Your Size Status

Preparing for Size Graduation

Special Size Rules for Set-Aside Programs

Industry-Specific Considerations

Information technology services (541511-541519): Generally use employee-based standards ranging from 150 to 1,000 employees depending on specific code
Management consulting (541611-541618): Typically revenue-based with $19.5-$25.5 million thresholds
Engineering services (541330): $25.5 million average annual receipts
Construction: Revenue-based, varying by specialty from $19 million to $45 million
Manufacturing: Employee-based, typically 500-1,500 employees depending on subsector
Research and development (541715): 1,000 employees, among the highest employee thresholds

Small Business Size Standards: Revenue and Employee Thresholds

Source & Authority Information

How Size Standards Work

Employee-Based Standards

Small Business Size Standards: Revenue and Employee Thresholds

Source & Authority Information

How Size Standards Work

Employee-Based Standards

Revenue-Based Standards

The Affiliation Rules

Common Affiliation Triggers

Calculating Your Size Correctly

Size Determination and Protests

What Happens If You're Protested

Managing Your Size Status

Preparing for Size Graduation

Special Size Rules for Set-Aside Programs

Industry-Specific Considerations

Maintaining Compliance Documentation