A micro-business, as the name suggests, is a small business – but often smaller than you may imagine.
Any business with 5 or fewer employees may be technically considered a micro-business, which means that individuals working in a self-employed capacity are also considered a micro-business.
Micro-businesses are very common. Most small shops – for example, convenience stores – may be micro-businesses, along with all the independent plumbers, electricians, consultants, etc. Micro-businesses do not necessarily require premises to operate from – many micro-businesses run from the homes of the owners, and in the case of service providers, the service is often provided on-site.
The combined value of all these businesses together makes a significant impact on the economy of the country – without these businesses, a far greater number of people would be considered unemployed. They may even face difficulties in getting a regular job as most who run their own micro-business are unsuited to working for someone else – the entrepreneurial spirit that drives them is unable to settle for playing second fiddle.
The flexibility of a micro-business also makes it easier for business owners to implement change, including new ideas and technology. While rigorous testing and planning ensure the stability of a larger business, the flying-by-the-seat-of-your-pants nature of quick change and the fast uptake of new technology can often give the micro-business a competitive edge. More importantly, due to the lower overheads, micro-businesses can be extremely targeted in regards to the niche they serve. For example, a plumbing company will take on all aspects of plumbing – a micro-business may just specialise in installing heating systems, and may do it better than a larger business as they have more direct experience.
The downside of running a micro-business is virtually identical to the issues faced by all self-employed people – while you have the freedom to do everything you want, you also have the responsibility of having to do everything you need. You are responsible for the day to day running of the business, actually doing the work, ensuring tax returns are filed properly and on time, working on marketing plans, etc. If the business fails, you have a serious problem – but if the business thrives, the wealth does not have to be spread as far!