What is a small business?
A small business is defined by the Small Business Administration (SBA) according to the number of employees or average annual receipts. When asked, most people think a small business is one with only a few employees or perhaps 100 at most. However, for purposes of applying for loans, federal or state contracts, a small business may be much larger.
According to SBA, a manufacturing or mining business with 500 or less employees, or $7 million or less in average annual receipts for non-manufacturing entities qualifies as a small business. Actually each business classification has its own defined maximum, but the majority fall into the above range. To find out the exact standard based on the North American Industry Classification System (NAICS) consult the Table of Small Business Size Standards.
Why does size matter?
When Congress signed into law the Small Business Act of 1953, creating the SBA, it did so for the purpose of ensuring that a fair share of federal government contracts would be awarded to smaller businesses. During WWII and after there were tremendous opportunities for contracting with the United States military. Smaller companies with great ideas and a willingness to provide services often had a hard time competing with the bigger corporations. The SBA helped to level the playing field.
As in the 1950s, today, small businesses play a vital role. They are thought to be the key to this country’s economic recovery. Size matters because there are contracts, loans, and more set aside based on the size of a business. These contracts can be the key to maintaining or growing a business. Also, size will make a difference when many of the provisions of the recently signed Affordable Care Act–national health insurance reforms–go into effect. Among the many useful resources available, the SBA offers free on-line tutorials and courses on how to compete for government contracts.
What SBA assistance is available in Alaska?
The Alaska District Office of SBA is located in Anchorage. Additionally, the SBA provides funding for the Alaska Small Business Development Center (Alaska SBDC). Also, located in Anchorage, but with branches in each region of the state, Alaska SBDC offers free services to those wishing to start a business in the Last Frontier. From writing a business plan, applying for loans and more, both the SBA and the Alaska SBDC have a wealth of information on their websites. Plus, each regularly host and sponsor zero or minimal cost education programs that include seminars, workshops, classes and networking events to help Alaskan entrepreneurs succeed. For those active in social networking, both SBA and Alaska SBDC are on facebook.