What is a reasonable definition of small business? What number of employees or what level of activity is sufficient to distinguish a large scale company from a small-scale business? There is no single cutoff to distinguish small from medium or large businesses. Different government agencies and private organizations rely on different sets of criteria when talking about a small enterprise.

In some cases, industry sector matters as well. A 250-person company in the automobile industry, say, may be considered small while a similar sized firm might be categorized as a medium-scale operation in another sector, such as clothing manufacture or legal services. So too with annual revenue. A company doing $5 million a year in sales might be labeled a small business in some contexts but not in others.