We all heard about starting a startup or being a small business owner, but what is actually micro business or micro enterprise? As the name implies it, it would mean a smaller scale of a business in general or perhaps a type of business that could act as baby steps for anyone who wants to embark in their entrepreneurial journey.
Micro business and its definition
A micro business or micro enterprise is a form of small enterprise that operates on a very small scale. Usually, the scale is determined according to the number of employees of the company, overall size,and often how much money was needed to start the business.
In general, if you meet the below standard, you can call yourself a micro business owner.
- Have 1-9 employees
- Generated less than $250,000 in annual sales
- Low capital needed (less than $50,000) to start
To put it simply, micro business is a business run by single owner or solopreneur that have little to no employees with tiny operations. It can also refer to side hustles that he or she is doing such as freelancing in a specific niche, independent contractors or working in the gig economy just to earn some extra income. Creative industry also holds a lot of micro business individuals who provides professional services such as video editing, programming, graphic designs, and more.
Find here for some tools that you can use if you're a solopreneur or freelancer.
Micro business vs small business
You can consider micro business as a subcategory of a small business. Small business may require a team of more than 10 employees to cater different needs of your operations which also require more capital. For micro business, not so much.
All micro businesses are small businesses. But not all small businesses are micro businesses.
But often times, micro businesses are the early stages of small business that will grow over time. Imagine if you are doing graphic designing as a freelancer. With more demand of your work, there’s opportunity for you to expand your reach to your potential client and perhaps create an agency to meet those demand. You could hire more designers that can work for you and undoubtedly shift your micro business into a small business tier.
Nevertheless,it also depends on the micro business owner’s appetite and vision of their business. Most business owners would want to grow their business and capitalize on the opportunity. Some may want to remain it as a side hustle as a mean to earn extra money on top of their routine job.
How you can start having a micro business of your own
Even though micro business is just a business at a very small scale, it does require the same amount of planning, determination, dedication,and effort as any large corporation would need when they first starting out. Any business should have their own roadmap, or a business plan no matter the sizeof your business. Here are some few steps as a guide for you to start your micro business.
1. Set your business goals
If you want to start a business, you have to set goals. Set targets of where you would want your business to be in the next 5 years or in the long run. When you set your targets, you have clarity in what you need to do to succeed in your business.
2. Build a plan on how to achieve those goals
Develop a business plan that covers every operation there is in your business. Once you have set your goals, create a plan that acts as a framework or guide on how you would operate your business. Planning is essential to generate sustainability to your business.
The plan may cover from what kind of potential client you want to target, what kind of services you want to produce, where would you market your business, and many more. Answering all these questions will give you an idea of how to run your business from every angles. Once you got this figured out, you can execute the business according to the plan.
3. Monitor your financials
Every business will have some expenses to support your operations. If you’re an Etsy seller, you will need to think about the cost to make your products, packaging, shipping and many more. If you’re an e-commerce seller,you will need to pay for website hosting, domain name and advertising.
It’s important to track your expenses of your business to avoid overspending on anything unnecessary considering the size of your operation. Set a budget limit of how much you are willing to spend and if you’re ready to scale, only then you should consider increasing your budget. But above all, know what you are spending and don’t spend unnecessarily.
Here are some options you can use to manage your finances
4. Rinse and repeat. Stick with the plan.
Considering you already have a business plan and assuming that it works, just keep on doing it and stick with the plan. That would be your business model for your micro business and as long as it brings in money to you, you got no reason to change or deviate from your plan. In other words,you’re on the right track!
Should there come a time where you are ready to scale your micro business, just repeat the steps but with higher goals, more detailed business plan and stringent monitoring of your finances, because going big means higher risk as well and that is something that you should take into consideration.
Challenges in micro business
1. Securing a business funding (if needed)
For any businesses, securing capital loans and financing is not entirely easy for any organization of any kind. Lenders want assurance that business owner can and will pay back the amount that is being loaned out and they see micro business as a business that have less stable operation. Chances are slim in those odds to secure a business funding in that context.
What usually micro business owners would do is using their own personal savings, apply for personal loans, seek support from family and friends or even crowdfunding to reach their necessary capital.
2. Marketing your products/services
Marketing might be tough for new micro business owners as you might be competing with other business owners who have already created a name for themselves among potential clients in your specific niche. It always comes down to how you would want to make an impact, the first impression per say, to your targeted customers. Be creative with your marketing, provide a better service on top of your competitors, establish a competitive advantage, and most importantly, be consistent. If you’re consistent enough, people would eventually want to try what you have to offer.
Among marketing channel that you can try is as follows:
- Sell it to friends & families and ask them to spread the words
- Promote your business in social media (Facebook, Twitter, Instagram, Pinterest, YouTube)
- Create a website and drive traffic to it
- Sell products on e-commerce platform such as Amazon, Ebay, Etsy, etc.
- Sell services on gig platform such as Fiverr, Upwork, PeoplePerHour, etc.
3. Multi-tasking several functions
For micro business owners, handling few functions at all times on your own can be quite the challenge. As the operation going to be quite small, you might have to do all the work that needs to be done from making the product, to packaging, to shipping, to handling your finances, to design posters or social media posts, to maintaining your website, and many more. Alternatively, you could outsource certain function to other people if you have the budget to do so.
If don’t wish to outsource these functions, there are several business tools that you could use to assist you to run a smoother operation.
- Designing social media post and promotional materials
- Handle your bookkeeping
- Packaging & shipping your products
- Task management
Micro business ideas and examples
1. Online freelancing
If you have some specific skills at your disposal, you could probably exploit them and make a side hustle out of it. For example, if you’re good at graphic designing, go ahead and design some stuff for people. You can go on platforms such as Fiverr or Upwork and sell your services.
Even if you don’t have certain skill set such as those, you can still do some general works such as admin work that people would usually outsource to. Some of them are:
i. Virtual Assistant
Business owners out there would need help with admin task in managing certain request they received on their website via email or messaging. You can help them out by catering to their request and get paid for a handsome amount of fee.
ii. Tutoring
You can tutor kids for exams and teach them basic subjects that is taught in school and get paid in doing so.
iii. Writing
You can become a writer and write articles or blog post for website owners. Usually website owners need content to be put on their website,but they don’t have the time to write a good quality content. That’s where you come in.
iv. Proofread
Certain task will require you to proofread an article or content and make sure everything is in order, grammar-wise. You can get paid too with this simple task.
v. Translator
If you are fluent in multiple language, perhaps you can try to do some translation work. Often times, people will need your help to translate some content in a foreign language into English or vice versa. You can put your multi-lingual background into good use.
vi. Write subtitles
For internet marketers out there, they will probably have some videos to market their products or services. And sometimes, it is not subbed. Study shows captioned YouTube videos saw a 13.48% increase in views within the first 14 days they were published. This really shows how important subtitles or captions is.
vii. Logo design
Even if you don’t have the skill to design a logo or the creativity to do so, there are website such as Logaster or Tailorbrands that can create for you. You essentially just received the request from platforms like Fiverr, charged them an amount, and create their logo using the mentioned websites for free or with a small amount of money.
viii. Search Engine Optimization (SEO)
SEO is hugely in demand for any new websites out there. This is because with SEO knowledge, you are able to rank high up in the search engine like Google and gain more organic traffic to the websites. What you can do is brush up your knowledge on SEO and offer to boost up these website’s ranking to their owners.
2. E-commerce/ Website
You can sell products or services on e-commerce platforms or create your own website. E-commerce platforms include Amazon, Ebay or Etsy while creating your own website means creating a digital store of your own. People do make money using this method.
i. Dropshipping
The most common e-commerce method that people is using as a business model is dropshipping. Dropshipping means you buy the product from a supplier for cheap and sell it to the end-user for more. The best part of this is that you don’t even need to handle the shipping. The supplier will ship it for you.
ii. Private label
Private label means making a brand out of the product that you want to sell. You can work with suppliers out there to provide you with the products, you label it and put a brand on it, and then you sell it as your own brand. If you’re ambitious to start your own brand, this might be the starting point.
iii. Website (selling services)
Let say you are a photographer and wanting to sell your photography services for wedding or events, setting a website if the way to go. You can then showcase your portfolio of all the photos that you have taken and reach out to potential clients using the website.
3. Affiliate marketing
Affiliate marketing is simply a salesperson business model where you need to sell on behalf of the product that you choose and get paid a commission. Only it is done digitally via the internet and not physically. It is a good entry point for anyone to start and get the feel of marketing but only you need to be creative to making a sale via the web. You can do it anywhere in the world as long as you have a laptop and an internet connection.
In essence, micro business can be considered the small steps that you need to take to later create an empire out of yourself in this entrepreneurial journey. It also can be a side hustle that you can do to make extra income on top of your regular work. However, it does come with its challenges and obstacles in the process which is normal in any type of businesses.
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