An Empirical Investigation into the Size of Small Businesses

A fundamental understanding of small businesses begins with an adequate definition of what constitutes a small business. Often the definition of a small business incorporates the definitions employed by the Small Business Administration (SBA) which, in part, uses the number of employees as the definitive measure. This paper examines the SBA’s definitions of a small business which use the number of employees as the standard. We find little evidence that supports the use of SBA definitions or any definition that relies on the number of employees.