{"id":2985,"date":"2023-02-19T16:11:15","date_gmt":"2023-02-19T16:11:15","guid":{"rendered":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/understanding-small-businesses\/"},"modified":"2025-05-22T14:53:27","modified_gmt":"2025-05-22T14:53:27","slug":"understanding-small-businesses","status":"publish","type":"chapter","link":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/understanding-small-businesses\/","title":{"raw":"Learn It 8.1.2: Small Business, Big Impact","rendered":"Learn It 8.1.2: Small Business, Big Impact"},"content":{"raw":"<h2>Why Being a Small Business Matters<\/h2>\r\n<div>\r\n<p>Classification as a small business matters, because the SBA size standard is used to determine whether a business, including any affiliates or subsidiaries, is eligible to participate in SBA and federal contracting programs. This eligibility can have significant financial implications, from obtaining <a href=\"https:\/\/www.sba.gov\/funding-programs\" target=\"_blank\" rel=\"noopener\">access to small business financing<\/a>, (including access to loans, investment capital, and grants) to getting preference in scoring when you compete for federal government contracts. In 2021, the federal government awarded 26% of all contracts to small businesses, totaling $147 billion.[footnote]Bernal, Kyle. \u201cFederal Contract Spending in the Last 5 Years - GovCon Wire.\u201d GovCon Wire, May 25, 2022. https:\/\/www.govconwire.com\/articles\/federal-contract-spending-in-the-last-5-years\/[\/footnote]<\/p>\r\n<p>In addition to meeting the relevant numerical size standard, a business must also meet the following criteria in order to be eligible for SBA and government contracting programs:<\/p>\r\n<ul>\r\n\t<li style=\"font-weight: 400;\">For-profit enterprise<\/li>\r\n\t<li style=\"font-weight: 400;\">Independently owned &amp; operated<\/li>\r\n\t<li style=\"font-weight: 400;\">Physically located &amp; operating in the United States or its territories\r\n\r\n<ul>\r\n\t<li style=\"font-weight: 400;\">If located outside the United States, it must maintain a U.S. operation and make a significant contribution to the U.S. economy through the payment of taxes or use of American labor, materials, or products.<\/li>\r\n<\/ul>\r\n<\/li>\r\n\t<li style=\"font-weight: 400;\">Not in a dominant market position nationally<\/li>\r\n<\/ul>\r\n<section>\r\n<section class=\"textbox seeExample\">\r\n<h2>SnackEver<\/h2>\r\n\r\n[caption id=\"attachment_7891\" align=\"alignright\" width=\"162\"]<img class=\"wp-image-7891\" src=\"https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/21175140\/pexels-lisa-fotios-1894325-200x300.jpg\" alt=\"open bag of pretzels\" width=\"162\" height=\"243\" \/> Figure 1. Grecia Diaz started her e-commerce business from her home to sell healthy snacks.[\/caption]\r\n\r\n<p>Grecia Diaz and her family emigrated to Pittsburgh, PA from Venezuela. Because she was always looking for healthy snacks for her own family, she decided to start an e-commerce business from her home selling healthy snacks, like vegan pretzels and amaranth grain wafers.[footnote]U.S. Small Business Administration. \u201cVenezuelan Native Grecia Diaz Snacks Her Way to Success.\u201d Accessed April 24, 2023. https:\/\/www.sba.gov\/success-story\/venezuelan-native-grecia-diaz-snacks-her-way-success[\/footnote] She got help from the University of Pittsburgh Small Business Development Center, which is funded by the SBA. Grecia took entrepreneurial classes that are offered in English and Spanish and got advice from a bilingual business consultant.[footnote]Institute for Entrepreneurial Excellence. \u201cSBDC Success Story: SnackEver, LLC,\u201d January 26, 2022. https:\/\/entrepreneur.pitt.edu\/sbdc-success-story-snackever\/[\/footnote] She has been able to expand through the 2020 pandemic and the accompanying supply chain challenges, growing so much that her business more space than was available in her home and made a move off-site.[footnote]Id.[\/footnote]<\/p>\r\n<\/section>\r\n<section class=\"textbox tryIt\">[ohm2_question height=\"300\"]4466[\/ohm2_question]<\/section>\r\n<p>&nbsp;<\/p>\r\n<\/section>\r\n<\/div>","rendered":"<h2>Why Being a Small Business Matters<\/h2>\n<div>\n<p>Classification as a small business matters, because the SBA size standard is used to determine whether a business, including any affiliates or subsidiaries, is eligible to participate in SBA and federal contracting programs. This eligibility can have significant financial implications, from obtaining <a href=\"https:\/\/www.sba.gov\/funding-programs\" target=\"_blank\" rel=\"noopener\">access to small business financing<\/a>, (including access to loans, investment capital, and grants) to getting preference in scoring when you compete for federal government contracts. In 2021, the federal government awarded 26% of all contracts to small businesses, totaling $147 billion.<a class=\"footnote\" title=\"Bernal, Kyle. \u201cFederal Contract Spending in the Last 5 Years - GovCon Wire.\u201d GovCon Wire, May 25, 2022. https:\/\/www.govconwire.com\/articles\/federal-contract-spending-in-the-last-5-years\/\" id=\"return-footnote-2985-1\" href=\"#footnote-2985-1\" aria-label=\"Footnote 1\"><sup class=\"footnote\">[1]<\/sup><\/a><\/p>\n<p>In addition to meeting the relevant numerical size standard, a business must also meet the following criteria in order to be eligible for SBA and government contracting programs:<\/p>\n<ul>\n<li style=\"font-weight: 400;\">For-profit enterprise<\/li>\n<li style=\"font-weight: 400;\">Independently owned &amp; operated<\/li>\n<li style=\"font-weight: 400;\">Physically located &amp; operating in the United States or its territories\n<ul>\n<li style=\"font-weight: 400;\">If located outside the United States, it must maintain a U.S. operation and make a significant contribution to the U.S. economy through the payment of taxes or use of American labor, materials, or products.<\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\">Not in a dominant market position nationally<\/li>\n<\/ul>\n<section>\n<section class=\"textbox seeExample\">\n<h2>SnackEver<\/h2>\n<figure id=\"attachment_7891\" aria-describedby=\"caption-attachment-7891\" style=\"width: 162px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-7891\" src=\"https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/21175140\/pexels-lisa-fotios-1894325-200x300.jpg\" alt=\"open bag of pretzels\" width=\"162\" height=\"243\" srcset=\"https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/21175140\/pexels-lisa-fotios-1894325-200x300.jpg 200w, https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/21175140\/pexels-lisa-fotios-1894325-683x1024.jpg 683w, https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/21175140\/pexels-lisa-fotios-1894325-768x1151.jpg 768w, https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/21175140\/pexels-lisa-fotios-1894325-1025x1536.jpg 1025w, https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/21175140\/pexels-lisa-fotios-1894325-1200x1798.jpg 1200w, https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/21175140\/pexels-lisa-fotios-1894325-65x97.jpg 65w, https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/21175140\/pexels-lisa-fotios-1894325-225x337.jpg 225w, https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/21175140\/pexels-lisa-fotios-1894325-350x524.jpg 350w, https:\/\/content-cdn.one.lumenlearning.com\/wp-content\/uploads\/sites\/15\/2023\/02\/21175140\/pexels-lisa-fotios-1894325.jpg 1280w\" sizes=\"(max-width: 162px) 100vw, 162px\" \/><figcaption id=\"caption-attachment-7891\" class=\"wp-caption-text\">Figure 1. Grecia Diaz started her e-commerce business from her home to sell healthy snacks.<\/figcaption><\/figure>\n<p>Grecia Diaz and her family emigrated to Pittsburgh, PA from Venezuela. Because she was always looking for healthy snacks for her own family, she decided to start an e-commerce business from her home selling healthy snacks, like vegan pretzels and amaranth grain wafers.<a class=\"footnote\" title=\"U.S. Small Business Administration. \u201cVenezuelan Native Grecia Diaz Snacks Her Way to Success.\u201d Accessed April 24, 2023. https:\/\/www.sba.gov\/success-story\/venezuelan-native-grecia-diaz-snacks-her-way-success\" id=\"return-footnote-2985-2\" href=\"#footnote-2985-2\" aria-label=\"Footnote 2\"><sup class=\"footnote\">[2]<\/sup><\/a> She got help from the University of Pittsburgh Small Business Development Center, which is funded by the SBA. Grecia took entrepreneurial classes that are offered in English and Spanish and got advice from a bilingual business consultant.<a class=\"footnote\" title=\"Institute for Entrepreneurial Excellence. \u201cSBDC Success Story: SnackEver, LLC,\u201d January 26, 2022. https:\/\/entrepreneur.pitt.edu\/sbdc-success-story-snackever\/\" id=\"return-footnote-2985-3\" href=\"#footnote-2985-3\" aria-label=\"Footnote 3\"><sup class=\"footnote\">[3]<\/sup><\/a> She has been able to expand through the 2020 pandemic and the accompanying supply chain challenges, growing so much that her business more space than was available in her home and made a move off-site.<a class=\"footnote\" title=\"Id.\" id=\"return-footnote-2985-4\" href=\"#footnote-2985-4\" aria-label=\"Footnote 4\"><sup class=\"footnote\">[4]<\/sup><\/a><\/p>\n<\/section>\n<section class=\"textbox tryIt\"><iframe loading=\"lazy\" id=\"ohm4466\" class=\"resizable\" src=\"https:\/\/ohm.one.lumenlearning.com\/multiembedq.php?id=4466&theme=lumen&iframe_resize_id=ohm4466&source=tnh&show_question_numbers\" width=\"100%\" height=\"300\"><\/iframe><\/section>\n<p>&nbsp;<\/p>\n<\/section>\n<\/div>\n<hr class=\"before-footnotes clear\" \/><div class=\"footnotes\"><ol><li id=\"footnote-2985-1\">Bernal, Kyle. \u201cFederal Contract Spending in the Last 5 Years - GovCon Wire.\u201d GovCon Wire, May 25, 2022. https:\/\/www.govconwire.com\/articles\/federal-contract-spending-in-the-last-5-years\/ <a href=\"#return-footnote-2985-1\" class=\"return-footnote\" aria-label=\"Return to footnote 1\">&crarr;<\/a><\/li><li id=\"footnote-2985-2\">U.S. Small Business Administration. \u201cVenezuelan Native Grecia Diaz Snacks Her Way to Success.\u201d Accessed April 24, 2023. https:\/\/www.sba.gov\/success-story\/venezuelan-native-grecia-diaz-snacks-her-way-success <a href=\"#return-footnote-2985-2\" class=\"return-footnote\" aria-label=\"Return to footnote 2\">&crarr;<\/a><\/li><li id=\"footnote-2985-3\">Institute for Entrepreneurial Excellence. \u201cSBDC Success Story: SnackEver, LLC,\u201d January 26, 2022. https:\/\/entrepreneur.pitt.edu\/sbdc-success-story-snackever\/ <a href=\"#return-footnote-2985-3\" class=\"return-footnote\" aria-label=\"Return to footnote 3\">&crarr;<\/a><\/li><li id=\"footnote-2985-4\">Id. <a href=\"#return-footnote-2985-4\" class=\"return-footnote\" aria-label=\"Return to footnote 4\">&crarr;<\/a><\/li><\/ol><\/div>","protected":false},"author":21,"menu_order":4,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"Understanding Small Businesses\",\"author\":\"Nina Burokas\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"pretzels\",\"author\":\"Lisa Fotios\",\"organization\":\"Pexels\",\"url\":\"https:\/\/www.pexels.com\/photo\/opened-pretzel-pack-1894325\/\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"}]","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"part":2981,"module-header":"learn_it","content_attributions":[{"type":"original","description":"Understanding Small Businesses","author":"Nina Burokas","organization":"Lumen Learning","url":"","project":"","license":"cc-by","license_terms":""},{"type":"cc","description":"pretzels","author":"Lisa Fotios","organization":"Pexels","url":"https:\/\/www.pexels.com\/photo\/opened-pretzel-pack-1894325\/","project":"","license":"cc-by","license_terms":""}],"internal_book_links":[],"video_content":null,"cc_video_embed_content":{"cc_scripts":"","media_targets":[]},"try_it_collection":null,"_links":{"self":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/2985"}],"collection":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/users\/21"}],"version-history":[{"count":13,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/2985\/revisions"}],"predecessor-version":[{"id":9492,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/2985\/revisions\/9492"}],"part":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/parts\/2981"}],"metadata":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/2985\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/media?parent=2985"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapter-type?post=2985"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/contributor?post=2985"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/license?post=2985"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}