10 shocking companies the government subsidizes as ‘small businesses’
With the so-called JOBS Act — which stands for the ‘Jump-start Our Business Start-ups’ and is a trickle-down approach to getting Americans to work — set to pass the House today and make its way to the president’s desk as early as tomorrow, one wonders what kind of small businesses would be helped by the legislation. The White House said in a statement, “Helping startups and small businesses succeed and create jobs is fundamental to having an economy built to last,” but the law exempts from disclosure requirements companies collecting $1 million from online investors, allows companies with 2,000 shareholders and $10 million in assets to avoid IPOs (and the disclosures that come along with that), and allows companies with under $1 billion in revenue to avoid some disclosures when they do go public. What kind of “small business” has $1 billion in revenue?
It turns out that the federal government has a long and storied history with designating certain business as “small,” regardless of whether they fit the colloquial understanding of a small business or not. The Small Business Administration is in charge of setting those standards for any federal program which confers a benefit to small businesses (including, but not limited to, federal contracting and small business assistance programs). Some business are considered to be small based on the number of employees; others are considered small based on gross income (known as receipts). In most cases, however, those definitions don’t bear a lot of resemblance to the small mom-and-pop operations the average American thinks of when they hear “small business.”
Here are 10 of the most shocking examples of how large companies can be before they stop being small businesses, as drawn from the SBA’s Table of Small Business Size Standards.
1. Internet publishing company: 500 employees
2. A freelance writer, artist or performer: $7 million in average yearly receipts
3. A janitorial or cleaning service: $12.5 million in annual receipts
4. A petroleum refinery: 1,500 employees
5. A doctor: $10 million in annual receipts
6. A child day care center: $7 million in annual receipts
7. A breakfast cereal manufacturer: 1,000 employees
8. A supermarket or other grocery store: $35.5 million in annual receipts
9. A cafeteria, grill buffet or buffet: $25.5 million in annual receipts
10. A cemetery or crematorium: $19 million in annual receipts