Crutzen (2008) distinguished a small business as having
the “power” or ownership in the hands of one person, with
many of the business’s activities being based on the personality
and business acumen of this individual. In this view, the business’s managerial structure is relatively simple and
informal, and the owner or CEO has sole responsibility for
managing all operational aspects.
Similar to Peterson, Albaum, and Kozmetsky’s (1986)
consumers, the U.S. Small Business Administration (SBA)
bases its definition of a small business on the number of
employees and sales levels. Those limits for most non-manufacturing
businesses are no more than 500 and sales of $7
million (Summary of size standards by industry, n.d.).
Although these size limitations are the controlling factors,
the SBA definition also includes the concept that a small
business is basically independently owned and operated, is
organized for profit, and is not dominant in its field (What is SBA’s definition of a small business concern? n.d.).
Based on the number of employees, the SBA’s definition
covers the vast majority of U.S. businesses. For example, in
Colorado, approximately 98 percent of businesses have
fewer than 100 employees, 90 percent have fewer than 20
employees, and 60 percent have from 1 to 4 employees.
Nearly 80 percent of the state’s wages come from businesses
with fewer than 500 employees (Draper 2012).
In summary, the definition of small business used in this
study is as follows: it is independently owned and operated,
ownership can be viewed as having a “mom and pop” feel,
it employs less than 500 employees, and it earns less than
$7 million dollars annually. Most restaurants fit this category,
because 93 percent of them employ no more than 50
people.