The Definition of 'Small Business' Is Getting Bigger. Here's How Truly Small Businesses Can Compete.

What actually happened

On August 20, the Small Business Administration proposed new size standards for 338 industry groups and industries, the rules that decide which businesses count as "small" for federal purposes. The proposal would consolidate nearly a thousand different standards, move some industries from revenue-based to employee-based measures, and generally raise the caps so more companies qualify as small. The SBA's own estimate is that roughly 110,000 to 114,500 additional firms would newly count as small.

How much bigger are the proposed caps? The law firm Crowell & Moring, which tracks federal contracting, says some thresholds would rise as much as tenfold. A letter from thirteen senators asking the SBA to rescind the proposal puts the top end at over $1 billion in annual revenue (up from a $47 million maximum today) or 3,600 employees (up from 1,500). Whatever number you use, the direction is the same: companies ten or a hundred times your size could soon wear the same "small business" label you do.

Two things matter more than the headlines. First, this is a proposal, not a rule, and nothing has changed yet. Second, the fight is very much alive: the SBA has already drawn tens of thousands of comments (reporting on the exact count varies), pushed the deadline from September 21 to November 20 after senators and business groups pushed back, and you can still add your own comment while the window is open.

What this does and doesn't change for a ten-person shop

Here's the part most of the coverage skips. The SBA size standards decide who qualifies for federal contracting set-asides and SBA loan programs, and that's the whole lever. If you don't chase federal contracts and you're not applying for an SBA loan, your Tuesday looks exactly the same whether this passes or not, because a 3,600-employee company being "small" on paper doesn't put it on your doorstep.

If you do bid on federal work, this matters a lot, and it's worth a comment while the window is open. And if you're a Houston shop competing for ordinary customers, the honest takeaway is different: the businesses that were already bigger than you are still bigger than you, and no rule in Washington changes what you do about that.

Match their capabilities, not their headcount

That brings me to the part you actually control. A 200-person company doesn't beat you because it has 200 people. It beats you because those people form departments: a back office that never drops an invoice, a sales desk that follows up every lead the same day, a marketing team that publishes every week, customer service that answers in minutes, and an analyst who tells the owner what needs attention.

Ten years ago you needed the headcount to get those capabilities, and you don't anymore. One person with the right workflow can follow up every lead, every time. Your office manager can run invoicing, scheduling, and reminders that used to take a team. None of this replaces your people, and that's the whole point: decrease the workload, not the workforce, and let the team you already have punch at a weight class that used to be out of reach.

This is the first post in a short series on matching big-company capabilities without big-company headcount, and over the next few weeks I'll break it down department by department:

1. The back office: invoicing, scheduling, and reminders that run themselves.
2. The sales desk: every lead followed up the same day, every time.
3. The marketing department: publishing every week with a department of one.
4. Customer service: answering in minutes without a call center.
5. The analyst: turning messy numbers into "here's what needs attention."

Each piece will show what the big-company version looks like, what a ten-person shop can realistically have today, and the first workflow to start with (and if you want a head start on that last part, What Should a Small Business Automate First? walks through the 30-minute version).

Every piece will also end the same way: how your team keeps it running without me. The goal was never to make you dependent on a consultant, it's to get your team confident enough that the training wheels come off and you don't think about them again. That's the whole idea behind how I work.

The one thing to do this week

Whatever you think of the proposal, the SBA is listening until November 20, and tens of thousands of people have already said something. If reclassifying billion-dollar companies as small would touch your business, say so while it counts.

Then come back to the part you control. The label on the door doesn't decide whether your shop competes, the capabilities inside it do.

Sources

• Federal Register: "Small Business Size Standards," proposed rule, August 20, 2026 (91 FR 53741, Docket SBA-2026-0199)
• SBA Office of Advocacy: "SBA Issues Proposed Rules on Industry Size Standards and Revised Size Standards Methodology" (August 20, 2026)
• Crowell & Moring: "SBA Extends Comment Deadline on Historic Small Business Size Standards Overhaul" (September 22, 2026)
• Crowell & Moring: "SBA Proposes Major Overhaul of Small Business Size Standards for Federal Contracting" (August 2026)
• Covington & Burling (Inside Government Contracts): "SBA Extends Comment Period on Proposed Small Business Size Standards to November 20" (September 2026)
• U.S. Senate Committee on Small Business & Entrepreneurship: press release on the comment extension and rescission letter (September 23, 2026)