Reference no: EM131245889

The NAICS codes issued by the SBA establish the thresholds

You are a service disabled veteran Asian female working for a Contractor and see some lucrative business opportunities if you establish your own company. But, you know it takes a lot of cash/capital to start your own business - and you also want to hedge your bets - so you'd like to keep your current job too. Therefore, you ask your boss if you could perform your current technical position as a subcontractor (through your own business) rather than as an employee.

What are some of the potential issues and concerns that might arise from this scenario?

The "NAICS codes" issued by the SBA establish the thresholds for what constitutes a small business for literally thousands of different goods and services. There is some variation among the codes, but as a general rule of thumb if a company has more than $27 million per year of annual revenue it cannot be considered a small business, and is therefore ineligible for small business preferences or set-asides.

A company with $27 million in annual revenue typically has about 125 employees. Their competitors, however, are often industry behemoths like Lockheed, Boeing, General Dynamics, etc. who have 1000 (or more) times more annual revenue and employees and the economies of scale that provides.

Do mid-size companies provide any advantages over either a small business or an industry behemoth? If so, what?