A Small Business By Any Other Name….


The U.S. Small Business Administration (SBA) has recently changed the parameters of what it considers a small business for 34 different industry groups. This was a way for the SBA to allow more businesses to qualify as federal contractors and expand that universe. Under the Small Business Jobs Act 2010, the Small Business Administration is required to review its size standards and make adjustments to reflect market conditions. The actual order is available online through the Federal Register.

This change affects Colorado corporations and LLCs a great deal, considering that 98% of employers in the state are small business. Mostly, the revenue base of what was considered a small business was expanded. For example:

  • Management-consulting services: Previously limited to $7 million in order to be considered small, can now have average revenues over three years of $14 million.
  • Architecture firms that make up to $7 million annually now qualify as small businesses-before it was $4.5 million.
  • Computer-related services will include those with a $500,000 increase in annual revenue,  from $25 million to $25.5 million

These regulations are good news for some because it broadens the federal contract playing field for many Colorado LLCS , S Corporations and C Corporations. But there are concerns, such as crowding out smaller companies with limited resources. Either way, it is important for Colorado entrepreneurs , start-ups and business owners to understand where their business fits and the implications.

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