Running a business requires paying attention to a plethora of details, but the effect of these details on a small business is considerably different than on a larger company. Though the U.S. Small Business Administration has general guidelines defining small businesses, a number of factors ranging from annual gross receipts to employee job scope separate small and large organizations.


The Small Business Administration, or SBA, sets limitations on the amount of gross revenue an organization may collect before the agency considers it a big business. Though the SBA has established revenue limits, these numbers vary by industry and can cover a large range within industries. According to the SBA, service businesses that earn an average of between $2.5 and $21.5 million per year over three years, depending on the particular type of service offered, may be considered big businesses. Three-year average revenues of between $5 and $21 million for retail businesses, between $13.5 and $17 million for construction firms and $0.5 and $9 million for agricultural agencies also cross the line between small and big businesses.


The SBA notes that manufacturing companies with between 500 and 1500 employees may be considered big businesses, and wholesale companies with between 100 and 500 employees transition from small to large organizations. The number of employees is only a small portion of the transition from small to big business, though; in a small organization, employees typically perform more varied tasks within a considerably larger scope than their big business counterparts. In addition, small business employees may have a more frequently changing job description and a more entrepreneurial mindset.


Big businesses tend to create highly process-driven environments, and these organizations typically encourage employees to follow processes or risk disciplinary action. A small business, by contrast, typically encourages employees to take risks, innovate and even circumvent management-established policies to find new ways of increasing efficiency. As small businesses grow into large organizations, the companies tend to develop processes designed to minimize risk and set guidelines designed to keep employees focused on specific tasks.


Many, though not all, big businesses maintain a corporate structure under which a board of directors appoints a chief executive officer, the executive team runs the business and ownership lies with shareholders. Under the SBA’s guidelines, though, a small business must have independent ownership, typically under a single individual. Small businesses must be operated for profit, according to the SBA, and may not pursue non-profit status. In addition, many big businesses leave staffing decisions to a formal Human Resources department. In a small business, the owner may consult with managers on staffing decisions and even hire or fire employees himself.