NOTE:

The information on this page replicates a Federal Register Notice issued May 18, 1982. This standard is still current. A scanned image of the original notice is posted here.

 

Comparability of Statistics on Business Size

Federal Register Notice

May 18, 1982

OFFICE OF MANAGEMENT AND BUDGET

New Statistical Standard on Comparability of Statistics on Business Size
AGENCY: Office of Information and Regulatory Affairs, OMB.
ACTION: Notice of adoption of the new statistical standard entitled, Comparability of Statistics on Business Size.

SUMMARY

The new statistical standard provides common size of business categories to be followed by statistical agencies in their tabulations of business size data. The standard was formulated as part of a Government-wide effort to assist the Small Business Administration in developing a small business data base. The uniform size categories will enhance the use of business size data for economic analysis and policymaking. The standard was endorsed in the President’s March 1982 report on small business. This is the first Government-wide standardization of business size statistical data.

A draft standard was published in the December 2, 1980 Federal Register and the December 1980 Statistical Reporter for public comment. There were no objections to adopting the standard. A new item was added to the draft which recommends the provision of information on the average firm size within each category: such information is now published by the statistical agencies and presents no problem in the data compilation.

Issues in Developing the Business Size Standard

In developing the standard, special attention was given to balancing the considerations of which classifications are most relevant for analysis and policymaking, easy to understand, and do not diverge in a major way from existing size categories. Also, while the interest for analyses of small business is in businesses at the lower end of the size spectrum, it is necessary to trace developments in firms of a wide range of size categories in order to better understand the relationship of "small business" to the rest of the economy.

The employment, revenues, and assets size variables are based on numerical criteria only. They do not include descriptive terminology such as "small," "medium" or "large." Such nomenclature is a qualitative assessment which may vary with the use of the data, and is best left to users to apply as they see fit.

The standard provides for Federal agencies to use the statistical size categories for administering programs in the section on "Use for Federal Nonstatistical Purposes." It states that they shall be used * * * "only if the responsible Secretary (Administrator) has first determined that the use of such size categories is appropriate to the implementation of the program's objectives." In addition, if they are used in the operative text of a law or regulation, an example of recommended language to accompany their use is given to assure sufficient flexibility.

The new standard is published below.

Christopher DeMuth.

Administrator. Office of Information and Regulatory Affairs, Office of Management and Budget.

Statistical Standard: Comparability of Statistics on Business Size

The purpose of this directive is to provide a standard means of comparing business size series prepared by various Federal agencies. The Statistical Business Size Categories in the table below are to be used to classify reporting businesses by employment (number of employees), revenues (sales, receipts, shipments, etc.), or assets. Tabulations based on these categories shall be accompanied by precise definitions of the variables used to measure size (i.e., employment, revenues, or assets) and of the type of reporting unit tabulated (e.g., establishments, enterprises, companies, taxpaying units). Such definitions shall include adequate detail to allow comparisons with other definitions commonly used by Federal agencies.

1. Combining or Partitioning Categories. At the discretion of the agency which controls the data, adjacent size categories may be combined and/or the size scale may be truncated in published tabulations. Justification for such actions includes factors as the limited scope of the data, the need to assure the confidentiality of individual response, or very large sampling variability at the recommended level of detail. For example, tabulations of small businesses often truncate the upper end of the scale of size categories. The reasons for such actions shall be noted in the affected publication.

Whenever data are published that combine size categories, the Agency which controls the data shall maintain unpublished estimates or internal documentation sufficient to allow reasonable retrospective estimates of the unpublished detail. However, if categories are combined to assure confidentiality of individual responses, the unpublished estimates or agency documentation must be maintained in a form which is consistent with the confidentiality objective and the agency's authority to protect information from disclosure.

Statistical Business Size Categories

Employment

[Number of employees]

0

(none)

1

under

5

5

under

10

10

under

20

20

under

50

50

under

100

100

under

250

250

under

500

500

under

1,000

1,000

under

2,500

2,500

under

5,000

5,000

under

10,000

10,000

or more

Revenues or Assets

 

under

$25,000

$25,000

under

$50,000

$50,000

under

$100,000

$100,000

under

$250,000

$250000

under

$500,000

$500,000

under

$1 million

$1 million

under

$2.5 million

$2.5 million

under

$5 million

$5 million

under

$10 million

$10 million

under

$25 million

$25 million

under

$50 million

$50 million

under

$100 million

$100 million

under

$250 million

$250 million

under

$500 million

$500 million

under

$1 billion

$1 billion

under

$2.5 billion

$2.5 billion

under

$5 billion

$5 billion

or more

An agency may also define additional partitions within the standard tables to meet particular analytical needs. These partitions, however, must be in addition to and not in lieu of the standard categories, i.e., they must not prevent summing to the standard categories.

The largest size categories in the standard tables were selected to accommodate current (1980) uses. If it becomes useful to define additional (larger) categories, they should be defined in a manner consistent with the pattern established in the standard tables (e.g., 10,000 under 25,000 employees or $5 billion under $10 billion revenues).

2. Average Size Within Categories. The average size of firms within a size category may range from the lower to the upper end of the category. Knowledge of the average size provides additional information for analyzing patterns and trends in firm size. Therefore, it is recommended that statistical tabulations of business size data include the average size of firms in each category or information on the number of firms in each category that would enable the user to calculate the average size.

3. Effect on Data Collection Activities. The requirement to use Statistical Business Size Categories will often impact the planning of data collection activities. The size categories should be considered in defining stratum boundaries and in choosing cutoffs to limit reporting burden or for other purposes. Data collection plans which unnecessarily impede or encumber analyses based on the standard size categories should be avoided.

4. Transition to New Size Categories. Data tabulations that are presented in the new size categories for the first time shall be accompanied by overlapping data in the old categories for the same period, or some other means of bridging the old and new categories. This will enable users to link the historical data in the transition period and thus minimize the effect on the continuity of the series.

5. Use for Federal Nonstatistical Purposes. The Statistical Business Size Categories shall be used in the administration of any regulatory, administrative, or tax program only if the responsible Secretary (Administrator) has first determined that the use of such size categories is appropriate to the implementation of the program's objectives.

If the term, “Statistical Business Size Categories” is to be used in the operative text of a law or regulation, language similar to the following should be used to assure sufficient flexibility: "Business size categories shall mean the Statistical Business Size Categories as defined by the Office of Management and Budget subject to such modifications with respect to individual businesses or groups of businesses as the Secretary (administrator) may determine to be appropriate for the purpose of this Act (regulation)".

 

Last Modified Date: March 24, 2014