Creative business leaders operating in certain industries, namely the manufacturing, transportation, education and job readiness industries rely on funds from government contracts to pay their bills. These contracts are secured based on the types of work companies perform. According to the Small Business Administration, government contracts are also secured by small business owners based on the size of the companies they manage.
Small Firm Definition Changes by the Small Business Administration
At its official website, the Small Business Administration notes that, for professional, technical and scientific services it has, “increased 37 small business size standards for 34 industries and three sub-industries in North American Industry Classification System (NAICS).” Other industries impacted by the changes include real estate, rental and leasing, educational services, administrative and support, waste management and remediation services and transportation and warehousing.
The changes which are set to take effect March 12, 2012 may cause increased competition for government contracts between smaller and larger “small firms” according to National Small Business Administration as reported in the February 22, 2012 CNBC “SBA Changes Definition of Small Business” article written by Janean Chun. The article continued, “The SBA, which negotiates small-business contracting goals with various federal agencies, estimates the new definitions will make as many as 8,350 more firms eligible for contracts and financial assistance.”
Redefining the size of small firms may help some creative business leaders secure government funding, financial aid they were previously unable to get. However, depending on how businesses are grouped (e.g. engineering, architecture) some creative business leaders may find it harder to get contracts. And of course, even with the new definitions, in order for small businesses to continue to move forward, it’s important that changes to tax and health insurance laws reflect the desire for continued growth at national, regional and local levels.
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Sources:
http://www.sba.gov/content/what%E2%80%99s-new-with-size-standards (Small Business Administration: What’s New With Size Standards)
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