SBA Small Business Size Standards Guide 2025: NAICS Codes & Thresholds

Quick Answer: Am I a Small Business?

Small business status depends on your NAICS code (industry classification) and is measured by either average annual receipts (revenue) or number of employees. Each NAICS code has a specific threshold. For example, most construction contractors are small if under $45M in average annual receipts. You must also consider affiliation with other companies.

NAICS

Industry Code

5 Years

Revenue Average

12 Months

Employee Average

1,000+

NAICS Codes

How Small Business Size is Measured

The SBA uses two primary methods to measure business size, depending on your industry:

Average Annual Receipts

Used for most service industries and construction. Calculated as:

Total receipts over most recent 5 completed fiscal years divided by 5. Includes all revenue from all sources.

Number of Employees

Used for most manufacturing industries. Calculated as:

Average number of employees over 12 months (all employees including part-time, temporary, and leased workers).

Important: Size is Per NAICS Code

You may be small for one NAICS code but large for another. Your size status is determined at the NAICS code level for each contract. Always check the specific NAICS code assigned to the solicitation.

Understanding NAICS Codes

NAICS (North American Industry Classification System) codes are 6-digit codes that classify businesses by their primary activity. Each solicitation specifies a NAICS code.

Common Construction NAICS Codes

NAICS Code	Description	Size Standard
236220	Commercial Building Construction	$45.0M
237310	Highway, Street, Bridge Construction	$45.0M
238210	Electrical Contractors	$19.0M
238220	Plumbing, HVAC Contractors	$19.0M
238910	Site Preparation Contractors	$19.0M

Common Professional Services NAICS Codes

NAICS Code	Description	Size Standard
541330	Engineering Services	$25.5M
541511	Custom Computer Programming	$34.0M
541512	Computer Systems Design	$34.0M
541611	Administrative Management Consulting	$24.5M
561210	Facilities Support Services	$47.0M

Revenue-Based Size Standards

For revenue-based thresholds, the SBA calculates your average annual receipts (AAR):

Calculating Average Annual Receipts

Step 1: Gather Revenue Data

Total receipts (gross income + cost of goods sold) for your 5 most recently completed fiscal years. Use figures from your tax returns.

Step 2: Calculate Average

Add the 5 years of receipts together, then divide by 5. If less than 5 years in business, divide by actual years.

Step 3: Include Affiliates

Add receipts from any affiliated companies before calculating average. Affiliation rules determine which companies to include.

Example Calculation

Past 5 years revenue:

Year 1: $8M + Year 2: $10M + Year 3: $12M + Year 4: $15M + Year 5: $18M = $63M

Average Annual Receipts: $63M / 5 = $12.6M

For NAICS 238210 (Electrical Contractors) with $19M threshold: Qualifies as Small

Employee-Based Size Standards

Manufacturing and some other industries use employee count rather than revenue:

Who Counts as an Employee?

✓Full-time employees
✓Part-time employees (count as full employees)
✓Temporary employees
✓Leased employees
✓Employees of affiliates

Common Employee-Based Thresholds

500 Employees

Most manufacturing industries

1,000 Employees

Petroleum refineries, aircraft

1,250 Employees

Motor vehicles

1,500 Employees

Guided missiles, space vehicles

Affiliation Rules

Affiliation rules are critical — even if your company is small alone, you may be considered large when combined with affiliated companies:

When Are Companies Affiliated?

Ownership

One company owns or controls 50%+ of another

Common Management

Same person controls multiple companies

Common Ownership

Same owners control multiple companies

Identity of Interest

Close relationships (family, economic dependence)

Newly Organized Concern

Formed from/by another company to avoid size standards

Affiliation Exceptions

✓SBA-approved Mentor-Protege joint ventures
✓8(a) joint ventures meeting specific requirements
✓Small Business Investment Company (SBIC) investments
✓Certain employee stock ownership plans (ESOPs)

Size Protests

Competitors or the government can challenge your small business status:

Size Protest Process

Protest filed with contracting officer within 5 business days of award notification

CO forwards to SBA Office of Hearings and Appeals (OHA)

Protested company must provide documentation proving size

SBA issues formal size determination

Frequently Asked Questions

When is my size determined?

For negotiated procurements, at the time of initial offer. For sealed bidding, at bid opening. For GSA Schedule orders, at quote submission.

What if I grow and become large?

Once awarded a contract as small, you remain small for that contract even if you grow during performance. However, you must recertify at option exercise for contracts over $7.5M.

Do subcontractor revenues count?

Generally no. Subcontractor revenues are not included in your receipts unless there is affiliation. But subcontractor employees may count in some analyses.

Where can I find size standards?

SBA publishes all size standards at sba.gov/size-standards. You can search by NAICS code or industry description.

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