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What is a small business?


Last updated 2/3/2021 at 4:56pm

WASHINGTON – The majority of U.S. businesses have fewer than five employees. Small businesses are often hailed as a vital segment of our national and local economies and a primary driver of U.S. financial growth. But just what is a small business?

Is it based on a company’s number of employees or sales? Is it defined by the size of individual business locations, or “establishment,” or the size of the company, or “firm,” that owns those locations?

Firm size

To many, a small business is based on the amount of money it makes and number of employees at all, rather than at each, of i...

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