Certification in Supplier Diversity Practice Exam 2026 - Free Practice Questions and Study Guide

A small business is defined according to government standards based on specific size criteria outlined in the Federal Acquisition Regulation (FAR). These standards vary by industry and are typically based on the number of employees or average annual receipts, ensuring that the definition reflects the operational scale of businesses within different sectors. This regulatory framework allows for a consistent and objective measure to determine eligibility for various federal programs, contracts, and financial assistance designed to support small enterprises.

The other options do not align with the established governmental definition. While duration of operation, ownership structure, and employee count may provide context for the characteristics of a small business, they are not comprehensive criteria used by the government to classify a business as small. Therefore, the correct answer highlights the importance of adhering to the specific regulations set forth, which explicitly dictate the parameters for a business to qualify as small in the eyes of the government.