The federal government reserves a big share of its contracts for small businesses. The goal is at least 23% of prime contract dollars every year. But “small” doesn’t mean what most people think. It isn’t about how many locations you have or how new you are. It’s a specific number set by the U.S. Small Business Administration (SBA), and it’s different for every industry.
Here’s how to find your number in about 10 minutes, and what a major proposed change could mean for you.
Made Simple
- “Small” is set by industry. Your limit depends on your NAICS code.
- Most limits are based on your average yearly revenue over five years, or your average number of employees over 24 months.
- You don’t apply to be small. You confirm it yourself in SAM.gov, and it has to be true on the day you submit your offer.
- SBA has proposed new size standards. They aren’t final, and today’s rules still apply.
- SBA is accepting public comments on the proposal through November 20, 2026.
Why “small” matters
When an agency sets aside a contract for small businesses, larger companies can’t compete for it. Your size status is your ticket in. Every federal contract Intuity has won so far was a small business set-aside, so this isn’t theory for us. It’s the first box we check on every opportunity.
Step 1: Find your NAICS code
A NAICS code is a six-digit number that describes what your business does. Roofing has one. Management consulting has another. Many businesses fit more than one, and that’s fine.
Here’s the part people miss: each contract opportunity lists one NAICS code. That code’s size standard is the one that counts for that contract. So you might be small for one opportunity and not for another.
Not sure which codes fit you? Take our free 30-second quiz to see what the government buys from businesses like yours.
Step 2: Look up your size standard
SBA publishes the limit for every NAICS code. You can search it with the SBA Size Standards Tool or read the full table of size standards in the federal regulations.
Two examples, as of October 2026:
- Roofing Contractors (238160): $19 million in average annual revenue
- Administrative Management and General Management Consulting (541611): $24.5 million in average annual revenue
Some industries, mostly manufacturing, use a number of employees instead of revenue.
Step 3: Do the math (yes, SBA literally wants receipts)
If your standard is based on revenue, add up your total receipts for your last five completed fiscal years and divide by five. “Receipts” means almost all the money your business takes in, including sales, fees and interest. If you’ve been in business less than five years, SBA uses a formula based on how long you’ve been open.
If your standard is based on employees, average your headcount across each pay period for the last 24 completed months. Part-time and temporary employees count the same as full-time.
Plot twist: your affiliates count too. If your business is connected to another company through shared ownership or control, SBA may add its revenue or employees to yours. If that sounds like you, sort it out before you claim small status, not after.
Step 4: Confirm it in SAM.gov, and know when it counts
There’s no separate application to be “small.” You state your size for each NAICS code in your SAM.gov registration, and you confirm it again when you submit an offer. New to SAM.gov? Here’s how to register for free.
Timing matters. SBA looks at your size as of the date you submit your first offer that includes a price. Once you win a contract as a small business, you’re generally treated as small for the life of that contract.
One more thing: certifications like Women-Owned Small Business (WOSB), 8(a), HUBZone and Service-Disabled Veteran-Owned are separate programs. They each have their own requirements, and you have to be small first. See which SBA certification is right for you.
What SBA’s proposed changes could mean for you
On August 20, 2026, SBA proposed new size standards for 338 industry groups. Here’s the short version:
- Broader groups. Today’s list of individual codes would be combined into broader industry groups, each with one standard.
- Revenue to employees. Many industries would switch from a revenue limit to an employee limit.
- Higher limits for many. SBA estimates about 114,541 more businesses would count as small, including 37,002 that already take part in federal contracting.
- Not final yet. The proposal isn’t retroactive, and today’s standards stay in place until a final rule takes effect.
What could that mean? Most businesses that are small today would stay small. But some larger, more established companies could start competing for the same set-aside contracts you’re chasing. It’s worth knowing now, not when a bid you were counting on draws bigger competition.
What to do now
- Check your status under today’s rules. That’s what applies to every bid you submit right now.
- Look up your codes in the proposal. The full proposed rule lists the proposed standard for each industry group.
- Don’t change your SAM.gov registration yet. Wait for a final rule and its effective date.
- Know the comment period. SBA extended the comment period to November 20, 2026. Comments are submitted at regulations.gov under docket SBA-2026-0199, where comments already received can also be read.
- Keep your records tidy. Your tax returns and payroll records are what back up your size if anyone ever questions it.
Want a second set of eyes?
Size status is one of the first things we check when a business is getting ready for federal work. If you’re not sure where you stand, or which opportunities fit, book a free 30-minute intro call. No pressure, just a clear next step.
Last reviewed: October 20, 2026. This article is general information, not legal advice. Rules change, so always confirm with the official sources linked above.