Small Business Classifications

The Small Business Administration (SBA) defines a business concern as one that is organized for profit; has a place of business in the U.S.; operates primarily within the U.S., or makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials, or labor; is independently owned and operated; and is not dominant in its field on a national basis. The business may be a sole proprietorship, partnership, corporation, or any other legal form.

Small Business Concern

The term “small business” shall mean a business as defined pursuant to Section 3 of the Small Business Act and relevant regulations issued pursuant thereto. Generally, this means a small business organized for profit that is independently owned and operated, is not dominant in the field of operations in which it is bidding, and meets the size standards as prescribed in government regulations.

Large Business Concern

This is a business concern that exceeds the small business size code standards established by the SBA as set forth in the Code of Federal Regulations, Title 13, Part 121.

Foreign Business

This is a business concern organized under the law of a country other than the U.S., its territories, or possessions and is not incorporated in the U.S.

Non-profit Organization

This is any organization not conducted or maintained for the purpose of making a profit. Included in this category are sheltered workshops, universities, colleges, and local, state and federal governments, NISH (Creating Employment Opportunities for People with Severe Disabilities, and NIB (National Industries for the Blind).

Historically Black College/University or Minority Institution

Historically Black Colleges and Universities (HBCUs) are institutions that were established before 1964; whose principal mission was, and is, the education of Black Americans; and meet the requirements set forth in the Code of Federal Regulations (CFR), Title 34, Part 608. Minority Institutions (MIs) are institutions that substantially increase the higher education opportunities for minority and/or low-income students' educations and meet the requirements set forth in Title 34 of the CFR, Part 607.2.

Minority-Owned or Minority Business Enterprise (MBE)

This is a business concern that is at least 51 percent owned by one or more minorities; or, in the case of any publicly owned business, at least 51 percent of the stock is owned by one or more minorities; and whose management and daily business operations are controlled by one or more minorities.

SBA-certified Small Disadvantaged Business Concerns (SDB)

This is a business concern at least 51 percent owned by a person recognized as a socially and economically disadvantaged individual; or, in the case of any publicly owned business, at least 51 percent of the stock is owned by one or more persons recognized as a socially and economically disadvantaged individual.

SBA-8(a) Small Disadvantaged Business Concerns (SDB)

This is a business certified by the SBA as a socially and economically small disadvantaged business for consideration of government set-aside contracting opportunities and business development. SDB-8(a)’s must include copies of their certification letters from SBA.

HUB Zone Small Business Concerns

This is a business concern located in an “historically underutilized business zone,” owned and controlled by one or more U.S. citizens, and at least 35% of its employees must reside in a HUB Zone. It must appear on the list of Qualified HUB Zone Small Business Concerns maintained by the SBA.

Women-Owned or Women Business Enterprise

This is a business concern at least 51 percent owned by one or more women, or, in the case of any publicly owned business, at least 51 percent of the stock is owned by one or more women, and whose management and daily business operations are controlled by one or more women.

Veteran-Owned Small Business Concerns (VOSB)

This is a small business concern that is at least 51 percent owned by one or more veterans, or in the case of any publicly owned business, at least 51 percent of the stock is owned by one or more veterans, and whose management and daily business operations are controlled by one or more veterans.

Service-Disabled Veteran-Owned Small Business Concerns (SDVOSB)

This is a small business concern at least 51 percent owned by one or more service-disabled veterans, or in the case of any publicly owned business, at least 51 percent of the stock is owned by one or more service-disabled veterans, and whose management and daily business operations are controlled by one or more service-disabled veterans or a permanent caregiver of a service-disabled veteran with permanent and severe disability.

For more information on the U.S. SBA, please visit SBA.gov.