You’re the go-to for onboarding, compliance, upskilling, and somehow still the one everyone calls when they forget their login. Welcome to the wild (and wildly important) world of HR and L&D at a small business. It can be challenging, for sure, but there’s good news: you don’t need a massive budget or a full-time training team to build something impactful. You just need the right tools—and yes, that means finding the best LMS for small business. Whether you’re leveling up employee training, juggling compliance, or just ready to ditch the duct tape and spreadsheet method, this guide will help you choose the best learning management system to keep your programs running smoothly and your people growing strong. 

What is a small business? 

Before we get too into it, a bit of housekeeping: what actually counts as a small business? When does a ‘small’ business become a ‘midsize’ business? Here’s a breakdown of what technically counts as a small business, based on legal and regulatory definitions—especially in the U.S.: 

Legal Definition of a Small Business 

In the United States, the Small Business Administration (SBA) defines a small business based on: 

Number of Employees 

• Most industries: Fewer than 500 employees 

• Some industries, like manufacturing or mining, may have limits up to 1,500 employees 

Annual Revenue 

• Ranges from $1 million to $47 million+, depending on the industry 

• For example, a retail business might be considered small if it earns under $8 million annually, while a construction firm could still qualify up to $39.5 million 

The specific size standards are determined by your business’s NAICS (North American Industry Classification System) code. The SBA maintains a searchable database to look this up based on your industry: 
https://www.sba.gov/size-standards 

General Rule of Thumb 

If your business has: 

• Under 500 employees, and 

• A relatively modest annual revenue for your industry… 

…you’re most likely operating as a small business in the eyes of regulators and vendors alike. 

Small Business Context for L&D 

Many LMS platforms define a "small business" even more narrowly—sometimes as under 250 employees—for pricing tiers, feature sets, and onboarding options. So it's worth checking the vendor-specific thresholds when evaluating training software. 

Four Primary Types of LMS Software 

Great! Now that we’ve clearly defined the standards of a small business and what that might mean when it comes to choosing an LMS, let’s explore the standards of the different types of LMS softwares. 

Pro-Tip: If it’s not clear yet – there is a lot of jargon and techy-words involved when purchasing a software solution. We know that can be kind of frustrating, so we put together a First Time LMS Buyer’s Guide that includes a glossary of LMS and learning & development terms. Hope that helps! 

1. SaaS (Cloud-Based) LMS 

What it is: 

A Software-as-a-Service LMS is hosted and maintained by the vendor. You access it via the internet—no installation or in-house server needed. 

Best for: 

• Small to mid-sized businesses 

• Teams without IT support 

• Fast implementation and low overhead 

Pros: 

• Easy setup and maintenance 

• Regular updates and support 

• Scalable pricing based on users 

Considerations: 

• Limited control over deep system customization 

• Data is stored in the vendor’s cloud 

Example: BizLibrary, TalentLMS, Docebo 

2. Self-Hosted LMS 

What it is: 

A platform you install and run on your own server or cloud instance. You manage hosting, updates, and security internally. 

Best for: 

• Companies with internal IT resources 

• Organizations needing control over data and integrations 

Pros: 

• High customization 

• Greater data control 

Considerations: 

• Requires technical expertise and infrastructure 

• Responsibility for updates and security 

Example: Moodle (self-hosted version), Forma LMS 

3. Open Source LMS 

What it is: 

A type of self-hosted LMS whose source code is freely available. It’s flexible and often free to use (but not necessarily free to operate). 

Best for: 

• Tech-savvy teams that want full customization 

• Nonprofits, schools, and budget-conscious orgs that can be flexible with their time 

Pros: 

• No licensing fees 

• Full control over functionality and branding 

Considerations: 

• High IT overhead 

• Needs regular security patching and server management 

Example: Moodle, Chamilo, Open edX 

4. Installed or On-Premise LMS 

What it is: 

An older model where the software is physically installed on company servers or machines—not cloud-based. 

Best for: 

• Highly secure environments (e.g. military, financial orgs) 

• Organizations with strict data residency laws 

Pros: 

• Maximum data control 

• Doesn’t require internet for access 

Considerations: 

• Outdated model for most use cases 

• High maintenance and upgrade costs 

Example: Some legacy versions of SAP SuccessFactors or Oracle LMS 

Which LMS Type is Best for Small Businesses? 

Best Option: SaaS (Cloud-Based) LMS 

Why? Because it’s affordable, easy to deploy, and requires little to no IT involvement. Most SaaS platforms also include: 

• Built-in compliance tracking 

• Mobile-friendly interfaces 

• Scalable pricing 

• Customer support and onboarding help 

Open source LMSs are a great second option—if you have technical support and need heavy customization. But for the majority of small businesses, a SaaS LMS offers the best balance of ease, value, and functionality. 

Top 10 LMS Options for Small Businesses 

With so many learning platforms on the market, finding the best LMS for small business can feel like comparing apples to very complicated oranges. Whether you're looking for simplicity, scalability, rich content, or rock-solid compliance tools, the good news is: there’s a platform out there that fits your needs and your budget. Below, we’ve rounded up 10 of the top SaaS-based learning management systems for small businesses—including their standout features, pros and cons, and pricing estimates—to help you skip the stress and get straight to making the right choice. 

For small businesses seeking balance between value, ease of use, and content depth, TalentLMS and iSpring Learn offer great entry points depending on training goals and budget. If you're looking for all of the above plus rich content library plus expert support, BizLibrary is a standout that offers customizable packages to scale with you as your needs grow.  

Choosing the Best LMS for Small Businesses 

When it comes to choosing the best LMS for small business, it’s not about having the flashiest features—it’s about finding the platform that meets your team where they are. Look for an LMS that’s easy to implement, doesn’t require a full IT department to manage, and actually helps you deliver training that sticks. Whether you’re focused on compliance, onboarding, upskilling, or all of the above, the right LMS should save you time, scale with your growth, and make learning feel less like a chore—and more like a strategic win. Keep it simple, stay focused on your goals, and you’ll land on a platform that works as hard as you do.