Small Business Classifications

What are the definitions for each of the small business categories?

* Small Business

Size standards vary by industry, and are generally based on the number of employees (including affiliations) and the amount of annual receipts the business has. For more information visit: https://www.sba.gov – Size standards

* Veteran-owned small business (VOSB)

A veteran-owned small business that is at least 51% unconditionally owned and controlled by a veteran.

* Service-disabled veteran-owned small business (SVOSB)

The federal government’s goal is to award at least three percent of all federal contracting dollars to service-disabled veteran-owned small businesses each year. To qualify for the disabled veterans’ business program, the business must:

  • Be a small business
  • Be at least 51% owned and controlled by one or more service-disabled veterans
  • Have one or more service-disabled veterans manage day-to-day operations and also make long-term decisions
  • Eligible veterans must have a service-connected disability

Notably, the government currently runs two separate SDVOSB programs: one operating under the SBA’s regulations; the other under the VA’s regulations. For non-VA projects, a service-disabled veteran-owned small business simply has to self-certify as to its status in the government’s SAM database.

* Historically Utilized Business (HUBZone) small business

The HUBZone program fuels small business growth in historically underutilized business zones with a goal of awarding at least three percent of federal contract dollars to HUBZone-certified companies each year.  To qualify for the HUBZone program, the business must:

  • Be a small business
  • Be at least 51 percent owned and controlled by U.S. citizens, a Community Development Corporation, an agricultural cooperative, a Native Hawaiian organization, or an Indian tribe
  • Have its principal office located in a HUBZone
  • Have at least 35 percent of its employees live in a HUBZone

* Small disadvantaged business (SDB) 

The federal government’s goal is to award at least five percent of all federal contracting dollars to small disadvantaged businesses each year. A Small Disadvantaged Business (SDB) is a small business that is at least 51 percent owned by one or more individuals who are both socially and economically disadvantaged.

* Women-owned small business (WOSB) 

The federal government’s goal is to award at least five percent of all federal contracting dollars to women-owned small businesses each year. To be eligible for the women’s contracting program, a business must:

  • Be a small business
  • Be at least 51 percent owned and controlled by women who are U.S. citizens
  • Have women manage day-to-day operations and also make long-term decisions

* Incorrectly self-certifying can carry significant penalties—ranging from losing the award to being debarred.