What is a “Small” Business?
If you have a business you operate out of your house and are the only employee, you can be assured yours is a “small” business. But what if you have 10, 20 or 100 employees and your own shop? Are you still considered a small business? Wikipedia isn’t much help. It explains that small businesses are “corporations, partnerships and sole proprietorships which have fewer employees, and/or less annual revenue than a regular-sized business or corporation.” What? Huh?
Of course, we can assume a small business has fewer employees and revenue than a “regular” business, but can’t they be better defined?
It can be, but it is complex and depends on the type of business you operate. There are organizations, for example, that can still be defined as small businesses that have up to 1,500 employees and revenues of up to $40 million. To most, that would seem like a lot more than just a small business. But it appears the size of your business is not defined by comparing it to all other businesses, but to those in its industry category.
The Small Business Administration (SBA) says, for example, there are about 157,000 restaurants defined as “limited service”. About 37,000 of those have five or fewer employees. These would be defined as “small businesses” in their category.
When looking at all businesses overall, the SBA says a reasonable cut-off is about 250 employees.This helps explain why small businesses are so important to the American economy. The net is much wider than most of us believe.
If you operate a small business, are you confident you have an adequate amount of business insurance? You can find out without an obligation to make a purchase. Contact one of our professional independent insurance agents to discuss your company and your risks. They can put together a plan for you to review and make a decision.Of course, the final decision is always yours. Contact us today to start protecting your small business.