By Chris Wendel
The term micro-business is used freely these days as a catch-all phrase without much regard to its various meanings. As defined by the Small Business Administration, a micro business is a business that employs less than five people and grosses less than $35,000 annually in sales. It is likely that this classification was derived long before the advent of the internet prior to the emergence of other effective business models that now exist. Today people are wanting to run a business on a small scale, that can be worked in to their lifestyle, and started without a huge financial investment.
The part-time business: Changes in our national and regional economies have created by force micro-businesses that people start out of necessity. This could be any type of part-time work that supplements other employment.
The virtual workplace: A micro-business can also be a company that is started on a very small scale using skills and resources that an entrepreneur has accumulated along the way. Think of a graphic designer who wants to be home with their kids and now has some time to work virtually from a computer, supplying professional work to a company located elsewhere. The flexibility of the virtual workplace also allows people to live more where they want to and not tied so tightly to commuting to a larger urban center.
Small farm operations: Farms producing specialty crops (hops, heirloom tomatoes, specialty wine grapes) and value-added food products are growing in number throughout Northwest Michigan. This also includes small-scale C.S.A.’s (community supported agriculture) that are farms that sell shares to members prior to the growing season. It could be the woman who grows rhubarb in her garden and sells it to the farm stand up the road, to help pay for regular housing expenses.
Web-based commerce: Products can be produced locally can now be shipped to retail or wholesale customers throughout the world. Niche market communities can be developed through online marketing venues that circumvent capital intensive advertising methods.
Today’s micro-businesses involve less time and financial risk than their traditional counterparts, and can be started or exited without a lot of fanfare. The time to assess if the micro-business model can sustain itself and succeed can be determined quickly, sometimes in a matter of months.
Overall this new micro-business model is supplying employment and income to families that have chosen to be more innovative. This phenomenon will continue to grow in the next few years regardless of its recognition by economic developers who are focused on larger scale projects.