The Small Business Administration (SBA) considers economic characteristics comprising the structure of an industry, including degree of competition, average firm size, start-up costs, entry barriers, and distribution of firms by size. It also takes into account technological changes, competition from other industries, growth trends, historical activity within an industry, unique factors occurring in the industry that may distinguish small firms from other firms, the objectives of its programs and the impact on those programs of different size standard levels.
As part of its review of a size standard, the SBA will investigate if any business at or below a particular standard would be dominant in the industry. The SBA looks at the market share of a business and other factors which may allow a business to exercise a major controlling influence on a national basis. Size standards are meant to ensure that a business that meets a specific size standard is not dominant in its field of operation.
As part of its review of size standards, the SBA's Office of Size Standards will examine the impact of inflation on monetary-based size standards (e.g., receipts, net income, assets) at least once every five years and submit a report to the Administrator or designee. If the SBA finds that inflation has significantly eroded the value of the monetary-based size standards, it will issue a proposed rule to change the size standards.
Read more about Small Business Size Regulations.
Source: Code of Federal Regulations, Title 13, Part 121 - Small Business Size Regulations
