Microbusiness
What is a microbusiness?
A microbusiness is a small business with fewer than ten employees and no more than $2 million in annual revenue. Microbusinesses are typically sole proprietorships or partnerships that provide goods or services to their local community. These generally run the gamut from family-owned businesses to home-based operations and independent contractors.
Microbusiness vs small business
Small businesses are by definition larger than microbusinesses. Although the number varies according to different industries and regions, microbusinesses usually have up to ten employees, while a small business is defined as one that employs between 10-100. A small business will also have higher revenue, up to $25 million a year.
Another difference between the two types of businesses comes from funding needs. A small business may need larger capital from outside sources or loans to get started with resources such as manufacturing equipment and office space in order to successfully perform operations.Typically, a microbusiness won’t require this type of investment.
Lastly, while microbusinesses tend to focus on their immediate market, small businesses may have plans to promote and sell their product or service beyond a local community.
Microbusiness vs microenterprise
The terms microbusiness and microenterprise are often used interchangeably, but there’s a slight difference between them. A microenterprise typically has fewer than five employees and less than $1 million in annual revenue, making it even smaller than a microbusiness. The microenterprise model is often used by entrepreneurs who have limited funds and need to start a business with minimal capital.
Both types of businesses are considered micro ventures, and are set up using minimal investment and resources. The difference between them in terms of number of employees and revenue is not huge—and many times a microenterprise may grow into a microbusiness, or even into a small business.
You may also be interested in:
How to create a microbusiness plan
Creating a business plan is an important first step for anyone starting a microbusiness in order to set it up for success. It’s a chance to outline the goals of a business by making it clear what the brand will or offer as a service and laying out how they plan to accomplish this.
No matter how small, it’s always important to understand how a business will be funded. Microbusinesses should include financial management, forecasts and frameworks in their business plans to show how they’ll make money within a specific time frame. From there, it can be used to seek funding or investment, and should ultimately guide the business to profitability.
A microbusiness plan can also inform a small brand’s marketing strategies. It should include consumer research that sheds light on its target audience, alongside competitor research to stay ahead in the market. On top of this, a microbusiness plan can propose potential marketing assets, promotions and campaigns—from making a business website to setting up advertisements and social media posts.
Examples of microbusinesses
We’ve put together some inspiring examples of popular microbusinesses to give you ideas that can be started from home or by an individual.
Blonde Bakery: A home based bakery offering a wide range of homemade cakes
Cornercopia Market: Inspiring crafts and homemade jewelry
Sea Chef: Personal chef offering a variety of cooking services
Berties of Bay: Online clothing store
Greenhood: Landscaping, gardening and urban farming services
French mornings: Tutoring, coaching and online schooling
Resume Bros: Virtual bookkeeping and assistance services
Resource for starting a microbusiness
From training courses and microloan programs, to business mentorship opportunities and professional networks—when starting a microbusiness of your own, you should seek resources that can guide your new venture.
If you’re looking to start a microbusiness in California, for example, you can access the following microloans programs to get started:
Accion San Diego: Relevant for microbusiness owners in the southern part of the state, they offer micro loans of up to $250,000.
Grameen America: A non-profit organization which offers support for low-income individuals who want to start a business around the country.
Kiva: This is an online platform which connects lenders and business owners for loans of up to $10,000.