What Counts as a Small Business?

1. Current SBA Definitions

General Standard:

• SBA generally defines a small business as fewer than 500 employees 2024 Small Business Profile RESEARCH OUTREACH REGULATION +3
• IRS defines small business as less than $10 million annual revenue United Capital Source

Industry Variations:

• Size standards vary by industry based on NAICS codes SBAU.S. Small Business Administration
• Agriculture: maximum $750,000-$27.5M average annual receipts United Capital Source
• Manufacturing: 500-1,500 employees depending on the subsector Cochamber
• Some industries use financial assets or refining capacity as measures Selectgcr

Affiliate Rules:

• Must include employees/receipts of all affiliates when determining business size SBALendingTree
• Affiliation exists with 50%+ ownership or contractual control SBA

Scale:

• 98% of US small businesses have fewer than 20 employees Cochamber
• Over 27 million businesses have no employees (owner-only) Cochamber

Sources: SBA, IRS, LendingTree, Shopify, and Colorado Chamber

2. The Problem

Private Equity Shell Games:

• PE firm buys 100 restaurants
• Creates separate LLCs for each location
• Each LLC has 15 employees
• Each qualifies as "small business"
• Gets small business loans, grants, and tax breaks
• Total: 1,500 employees under same ownership
• NOT a small business — it's a disguised corporation

Franchise Monopolies:

• McDonald's franchisee owns 50 locations
• Each location is a separate LLC
• Each "qualifies" as a small business
• Owner is a millionaire, and controls the $50M+ operation
• Gets small business benefits meant for mom-and-pop shops

Tech Platform Manipulation:

• Amazon Marketplace "sellers"
• Actually Amazon subsidiaries
• Claim to be an independent small businesses
• Get the small business tax treatment
• All profits flow to Amazon

Serial Entrepreneur Abuse:

• Wealthy investor owns 20 "small businesses"
• Each under different family member's name
• Total: $100M empire
• Each business claims small business status
• Avoids taxes and gets subsidies

The Pattern: Large corporations and wealthy individuals game "small business" definition to extract benefits meant for actual Main Street businesses.

3. Our Small Business Definition

TIER 1: Micro Businesses

Full Benefits, Maximum Support

Who Qualifies:

• Fewer than 10 employees (including owner)
• Under $1 million annual revenue
• Single location or online-only
• Owner works in the business daily
• Not owned by a larger entity
• No PE/VC investment
• Not a a franchise

What They Get:

• Free website and e-commerce platform
• Free cybersecurity suite
• Free payment processing (0% fees)
• Free incubator services
• Free Tech Cooperative support
• Free legal defense
• $50,000 startup grants
• 0% loans up to $500K
• Commercial rent control (3% annual cap)
• Adaptive reuse priority
• Zero-interest minority business loans
• All protections at maximum level

Examples:

• Corner store
• Family restaurant
• Barber shop
• Freelance designer
• Local bakery
• Plumber (solo or small crew)
• Etsy seller
• Food truck
• Tattoo artist
• Daycare center

TIER 2: Small Businesses

Substantial Benefits, Strong Support

Who Qualifies:

• 10-50 employees
• $1-10 million annual revenue
• Up to 3 locations (all locally owned)
• Owner actively manages the business
• Not owned by a corporation/PE/VC
• Not a franchise (or single franchisee with ≤3 locations)
• Majority of profits stay with the owner/workers

What They Get:

• Free website and e-commerce platform
• Free cybersecurity suite
• Free payment processing (0% fees)
• Tech Cooperative support (sliding scale fees)
• Legal defense coverage
• 3% interest loans up to $2M
• Commercial rent control (3% annual cap)
• Platform fee cap (5% maximum)
• Supply chain protection
• Main Street revitalization programs
• Small Business Bank access
• Cooperative conversion support

Examples:

• Independent bookstore with 3 locations
• Manufacturing shop (50 workers)
• Regional distributor
• Restaurant group (2-4 locations with the same owner)
• Construction company
• Software consultancy (25 developers)
• Medical practice (multiple doctors)
• Auto repair chain (locally owned)

4. Who Does NOT Qualify

EXCLUDED COMPLETELY:

1. Private Equity Owned:
   • Any business with PE investment
   • Regardless of size
   • PE extracts wealth, doesn't build communities
   • Get ZERO small business benefits
2. Venture Capital Backed (Over $10M Raised):
   • VC-backed startups aren't "small"
   • They're funded to become monopolies
   • No small business benefits
   • Exception: Under $10M raised, under 100 employees = Tier 2
3. Corporate Franchises (Large Franchisees):
   • Own 10+ franchise locations = NOT small business
   • Single franchise location = Tier 1
   • 2-3 locations = Tier 2
   • 4-10 locations = Tier 3
   • 10+ locations = Corporate, no benefits
4. Subsidiary of a Larger Corporation:
   • If owned by company over 500 employees: NOT small
   • If owned by public company: NOT small
   • If owned by multinational: NOT small
   • Absolutely NO shell games allowed
5. Serial Entrepreneurs (Portfolio Owners):
   • Own 5+ "separate" businesses
   • Total employees >500 OR total revenue >$50M
   • Count ALL businesses combined
   • If combined size exceeds limits: NO benefits
6. Publicly Traded Companies:
   • If you're on stock exchange: NOT small
   • No exceptions
   • Market cap doesn't matter

5. Anti-Abuse Enforcement

The Affiliate Test:

• All businesses with a common ownership are counted together
• All businesses with shared management are counted together
• All businesses in the same supply chain (controlled) are counted together
• Family members' businesses are counted together
• Shell companies are immediately pierced

The Reality Test:

• Does the owner work in the business? (Required for Tier 1-2)
• Do all profits stay local? (Required for all tiers)
• Is this genuinely independent? (Required for all tiers)
• Or is this corporate/PE disguising as a small business?

Penalties for Fraud:

• Fraudulently claiming small business status:
  • $1 million fine per instance
  • 5-10 years in prison
  • Lifetime ban from all small business programs
  • Must repay all benefits received + 300% penalty
• PE firms creating shell "small businesses":
  • $100 million fine
  • RICO prosecution
  • All benefits are clawed back
  • Public exposure and brutal shaming

Verification Process:

• Annual certification is required
• Random audits (10% of businesses/year)
• Whistleblower rewards ($100K for exposing fraud)
• Public database of all certified small businesses
• Transparent ownership disclosure

6. Special Categories

Worker Cooperatives:

• Always qualify if the co-op is under employee limits
• Regardless of revenue (up to $100M)
• Get enhanced benefits:
  • Cooperative conversion grants
  • Democratic governance training
  • Access to cooperative capital
  • Network connections
  • Technical assistance

Nonprofit Community Businesses:

• Qualify if:
  • It serves local community
  • Reinvest profits (not distribute)
  • Under 500 employees
  • Democratic governance OR community board
• Get Tier 2 benefits
• Plus nonprofit-specific support

Social Enterprises:

• Mission-driven businesses
• B-Corp certified OR community ownership
• Under 500 employees
• Transparent impact reporting
• Get Tier 2-3 benefits based on its size
• Plus social impact funding

Minority-Owned, Women-Owned, and Veteran-Owned:

• Enhanced benefits within their tier
• Additional grants and support
• Priority access to programs
• Dedicated resources
• No quotas, just support

7. Simple Qualification Flowchart

Step 1: Count ALL Employees

• Your business + all affiliates + all under common ownership
• Full-time + part-time + contractors (if long-term)
• Don't lie. We WILL verify.

Step 2: Calculate TOTAL Revenue

• Your business + all affiliates + all under common ownership
• Annual revenue for all entities combined
• Average of the last 3 years

Step 3: Check Ownership

• Owned by PE/VC/corporation? → NOT QUALIFIED
• Publicly traded? → NOT QUALIFIED
• Franchise with 10+ locations? → NOT QUALIFIED
• Part of larger network? → Count total network

Step 4: Determine Tier

• Under 10 employees + Under $1M → Tier 1
• 10-100 employees + $1-10M → Tier 2
• 100-500 employees + $10-50M → Tier 3
• Over 500 employees OR over $50M → Not a small business

Step 5: Apply for Certification

• Submit application
• Provide ownership documentation
• Tax returns (3 years)
• Employee count verification
• Affiliate disclosure
• Get certified or denied (30 days)

8. Why These Definitions Matter

Current System is Broken:

• 27 million businesses in US have no employees. Cochamber
• 98% of small businesses have fewer than 20 employees. Cochamber
• But PE firms with 1,500 employees game system claiming each location is "small business."

Our System is Honest:

• Tier 1 (under 10 employees): THE REAL SMALL BUSINESSES
• Tier 2 (10-100 employees): Growing independent businesses
• Tier 3 (100-500 employees): Medium businesses, not small
• Over 500 OR PE-owned: Corporations, period

Benefits Go to Right People:

• Free digital infrastructure → Micro businesses (most need it)
• Zero-interest loans → Real small businesses (can't get bank loans)
• Commercial rent control → Independent retailers (being displaced)
• Platform fee caps → Artisans and makers (being exploited)
• Legal defense → Working-class entrepreneurs (can't afford lawyers)

No More Shell Games:

• Every business counted honestly.
• PE can't hide.
• Corporations can't pretend.
• Wealth can't game the system.

9. Coalition Building

Why Small Business Owners Will Support This:

Even Tier 3 businesses benefit:

• Platform fee caps (save millions)
• Anti-monopoly enforcement (levels the playing field)
• Supply chain protection
• Public jobs board
• Legal defense

Tier 1-2 businesses get everything free.

The Real Enemy:

• Not medium businesses
• Not growing startups
• PRIVATE EQUITY
• CORPORATE MONOPOLIES
• WALL STREET EXTRACTION

Small business owner with 200 employees has way more in common with a solo barber than with Blackstone.

10. The Bottom Line

Small business = independently owned, locally rooted, and community-serving.

Period.

Not PE shell companies. Not corporate franchises. Not billionaire portfolio investments.

When we say "The Empire Ends With Us," we mean:

• No more corporations claiming small business benefits
• No more PE firms gaming the system
• No more Main Street exploitation

Our definitions protect:

• 27 million sole proprietors
• Millions of micro businesses (under 10 employees)
• Hundreds of thousands of genuine small businesses
• Worker cooperatives
• Community wealth

Not:

• Private equity vultures
• Corporate monopolists
• Franchise empires
• Billionaire "small business owners"

Real small businesses. Real support. Real accountability.