Whenever I introduce my business, Microbusiness Mentor, I am nearly always met with a confused stare and a furrowed brow. Some folks nod their heads and say, “Ah, interesting”, and then move on. But occasionally, someone isn’t too embarrassed to admit they have no idea what that means and proceed to ask my #1 question: What IS a microbusiness or microentrepreneur?
SMALL BUSINESS OR NOT?
My journey into the entrepreneurial world began when I dabbled in direct sales. Later, I started a really small business, painting rental homes for my landlord in exchange for rent, which grew into a house cleaning business. And then I stepped out and launched a little retail business with all the money I had – $500. I was completely ignorant about what I was doing and needed lots of help (but didn’t know it). However, I knew enough that I should find resources about business. But, I encountered a couple of obstacles when I started looking:
- I didn’t know where to start. (In other words, I didn’t know what I didn’t know.)
- There was NO money and my time was already maxed out.
Not to be one to give up right away, I figured I was going to have to find the time to learn the skills I needed.
In my search for small business resources, much to my surprise, I discovered that a small business was one that had up to 500 employees with hundreds of thousands to millions of dollars in revenue. Therefore, all the resources I found catered to businesses that had employees or contracted help AND substantial cash flow. I had neither.
I remember the day I sat shocked as I stared at my computer screen and declared, “I’m not a small business! I’m a MICRO business – or NANO business!!” I didn’t know there was such a thing. It’s just the only way I could explain my situation.
Oh, I had cash flow…but it flowed out the same day it flowed in and didn’t bother to stop long enough for me to admire it.
MICROBUSINESS OR MICROENTREPRENEUR DEFINED
Based on my experience and on the definitions of a few key organizations, here is the best way to define a microbusiness.
A micro business is a business with one owner and 5 or fewer employees, or a nonemployer. Collectively they comprise anywhere from 75-91% of all US businesses (depending on where you find your stats) and are primarily comprised of individuals working for themselves and their families. Many are in the moderate-to-low income range.
The SBA defines a microbusiness as a business with 1- 9 employees. Any organization without employees are considered “nonemployers” by the SBA and not a microbusiness.
The resources for a small business simply didn’t fit my needs – or my pocketbook.
Whenever I was asked what a microbusiness was, my definition was always 0 – 5 employees. It would seem that other private organizations who serve these teeny, tiny businesses reinforce my interpretation of a microbusiness.
Some banks or organizations refer to those who don’t have any employees as a “microentrepreneur”. While there isn’t a clear, across-the-board definition, it appears that the government and banking organizations consider you a microbusiness if you have at least 1 employee, while if you are working solo, then they think of you as a micro-entrepreneur.
BY ANY OTHER NAME…
Most of us would recognize a microbusiness by a number of other names.
- Sole Proprietor
- Main Street Business
- Mom and Pop
We can probably think of a dozen more identifiers that would give us a picture of the nature of microbusiness. In my experience, the micro-enterprise is the business that serves to generate the income of one (or a few) and has limited financial resources.
“THERE’S NO PROFIT IN THAT SECTOR”
Microbusinesses are largely ignored and resources are few and far between due to their very small nature – and budgets. At a Chamber of Commerce event a few years ago, just as I was forming the idea of Microbusiness Mentor, I tried to explain what I was building to fellow Chamber members. Without exception, every person I spoke with was uninterested and one person boldly said what everyone else was thinking, “There’s no profit to be had in that sector.”
Yet, I personally believe microbusinesses and micro-entrepreneurs collectively are big financial contributors to many families and communities. Therefore, they are a force to be reckoned with. (You can view reports on the impact of microbusiness here.)
Maybe there isn’t a huge profit to make from serving microbusinesses, but there is certainly a huge potential. Potential for the next great business to transform a community or nation. An idea stuck in a garage or kitchen table somewhere that’s going to change the family tree for future generations.
Our future is in microbusiness.
UNIQUE NEEDS OF A MICROBUSINESS
Microbusiness owners needs are unique as most of them are the sole worker in the business, requiring them to wear many hats and learn numerous skills.
- Some start with a passion or dream but no business understanding.
- Suddenly they are thrust into a situation where they realize that there is far more to running a business than just doing what they love.
- Sadly, (supposedly) nearly 80% of microbusinesses will fail within the first 5 years.
It isn’t easy being a microbusiness or microentrepreneur, but it can be done! While others ignore the massive opportunities with these tiniest of entrepreneurs, my goal is to see those statistics change and make resources accesible so no matter what stage an entrepreneur is in developing their idea, they have something to stand on that will help them to grow and become big business.
I love the microbusiness sector. It comprises hundreds of thousands of people from everywhere, with the smallest budget, who have figured out how to create income off of their ideas. All we need is a little encouragement, help, and a strong determination to make those ideas and talents viable, long-term businesses.
If you are a microentrepreneur or a microbusiness owner and would appreciate free and low-cost resources, click here to find out more. Also, stay in touch using the social media icons below.