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What is a Small Business?


Quality Glossary Definition: Small Business

Small business is defined as a privately owned corporation, partnership, or sole proprietorship that has fewer employees and less annual revenue than a corporation or regular-sized business. The definition of “small”—in terms of being able to apply for government support and qualify for preferential tax policy—varies by country and industry. The U.S. Small Business Administration defines a small business according to a set of standards based on specific industries.

Industry Not to exceed
Manufacturing and mining 500 employees
Wholesale trade 100 employees
Retail and service $6 million average annual revenue
General and heavy construction $28.5 million average annual revenue
Special trade contractors $12 million average annual revenue
Agriculture $0.75 million average annual revenue

While small businesses often can implement the same quality management systems found in larger corporations, they may face different challenges along the way. For instance, small businesses tend to have fewer human resources and less up-front capital to dedicate to quality initiatives. Upper management commitment and accessibility, however, can be stronger in a smaller business, and internal communications can be more straightforward.

Small Business Resources and Case Studies

Ten Ways Standards Contribute to Small Business Success

The International Organization for Standardization (ISO) shares what managers of small- and medium-sized enterprises (SMEs) from 10 countries say about how they have used standards. Read "10 Good Things for SMEs" on the ISO website. 

Webcast: ISO 9001 for Small & Medium-Sized Businesses

ISO 9001:2008 for Small and Medium-Sized BusinessesView a recorded webcast in which Denise Robitaille, author of The (Almost) Painless ISO 9001: 2015 Transition, presents an overview of using ISO 9001 to help small and medium-sized businesses better serve their customers.

ASQ/ANSI/ISO 19011:2018: Guidelines for auditing management systems

Standard iconU.S. Version with supplemental guidance added
The ISO 19011:2018 American National Standard provides guidance on principles of auditing, managing audit programs, and conducting quality management system audits and environmental management system audits. The supplemental text offers additional guidance for small businesses.

Toward Socially Responsible SMEs

Quality Management Journal Recent changes in quality award structuring promote the concept of social responsibility among small- and medium-sized enterprises (SMEs). Semra F. Aşcıgil's article from Quality Management Journal explores how the European Foundation for Quality Management Excellence Model provides guidance in integrating social responsibility into quality management. 

Also: learn about the Malcolm Baldrige National Quality Award, which includes a category for small business.

Additional Articles

Applying Lean Six Sigma in the Wood Furniture Industry: A Case Study in a Small Company
This paper presents a study on the implementation of Lean Six Sigma in a small furniture company.

Building Quality Communities
When considering how to create growth and public interest, focus on a few smaller projects at a time, rather than trying to tackle all of a community's issues at once.

Importance and Implementation of Baldrige Practices for Small Businesses
An empirical survey was conducted to identify the high-performance management practices outlined in the Malcolm Baldrige Criteria.

Small Business, Big Feat
Employee empowerment, solid leadership, and use of quality tools led PRO-TEC to a Baldrige award.

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