What Is a Small Business Size Standard?
A size standard is SBA's cutoff for counting as a small business in an industry. SBA sets one per NAICS code, in average annual receipts or employees.
Small business size standard in plain English
Janitorial services (NAICS 561720), for example, has a size standard of $22.0 million in average annual receipts. Receipts are averaged over your last five completed fiscal years, and employees over the last 24 months.
Your size is measured on the date of your first offer that includes price, against the size standard for the NAICS code on that solicitation. Affiliated companies' size is added to yours.
The current table took effect March 17, 2023. SBA has proposed changes, but they aren't final, so check the standard for each code you bid under.
Related terms
- NAICS code: A NAICS code is a six-digit industry code, such as 561720 for janitorial services. Each solicitation generally carries one, and it sets the size standard.
- Set-aside: A set-aside is a contract reserved for small businesses, or for one type of small business such as HUBZone or women-owned firms. Others can't bid.
- Rule of two: The rule of two requires a set-aside for small businesses when at least two responsible small businesses are expected to offer at fair market prices.
Put it to work
- Size standard checker: am I a small business?
- Who can get government contracts
- NAICS codes and size standards by business type
Looking for another term? Browse the full glossary or the government contracting glossary guide.