What is A Micro-Business, And is Your Business One Of Them?

What is a Micro-Business?

Micro-businesses or micro-entities is a business that is owned and operated by one person. They can be defined by having no more than ten employees working within the company, and their turnover is no more than £632,000. Micro-businesses can range from new ventures with high and low potential for growth to long-established family firms with a long history. Microbusinesses can also include sole proprietorships that are run and operated by the company's owner and no workers. Over 75% of businesses within the UK are run by a single person, and over 95% of companies within the UK match the definition of a micro-business.

Micro-Business Statistics

Below are some statistics that further define what a micro-business is:

• The average turnover of most micro-businesses in the UK is currently £286,879
• 1 in 5 micro-businesses operate a turnover of less than £50,000
• More than a third of the UK's micro-businesses are owned by families in London and the South East. (Unsurprising, given how many families in these locations try to supplement their income by turning their interests into careers).
• London has more than 400,000 micro-businesses (47 micro-businesses per 1000 people).
• Micro-businesses use less than 100,000 kWh of electricity per year and less than 293,000 kWh per year within their work space. Making them more sustainable than larger businesses.

The difference between Micro-businesses and Small businesses

The size of a small business vs a micro-business is the primary distinction. A micro business typically employs 0–9 people, whereas a small business employs 10–49 people. A small business also has a higher turnover and far more money on its income statement than a micro business. You run a micro-business if you are a sole trader, self-employed, or do not have any workers, unlike a small business where one person cannot be the only employee.

Some micro-businesses are just early-stage small businesses (or, eventually, large enterprises) that will grow over time, while others remain micro-businesses. It all depends on the intention and potential for the business owner's development.

What are the Pros and Cons of Starting a Micro-Business?

Like any sized business, they come with pros and cons to help you decide if starting one is a good idea. Below are the pros and cons of starting a micro-business:

Pros:

• Flexible - Starting a micro-business allows you to make complete decisions about your operations and schedule. You can work around your lifestyle and make sure that running your business is a good fit for you. Being alone entrepreneur can be challenging and time-consuming, but you always have the flexibility and power to make things better and more comfortable for yourself.
• Simple operation - Maintaining a smaller business is easier than keeping track of a larger one. There are fewer staff to keep happy and manage, documents to review, and submit, fewer fees for renting places, paying wages, and so on.
• Ability to grow - Being a micro-business means you have space to grow and thrive and make yourself a larger enterprise if you would like to. The only downside to this is the bigger you get, the more you need to help run your business, like spending on expanding your site and hiring more employees.
• Lower costs - You can start with a micro-business with a small amount of money, anywhere from £1,000 - £50,000. In contrast, other businesses require a lot more for a start-up payment. Operating and wage costs are lower because of how many employees you have and how small or non-existent your work location will be.
• Specialised services - When you are a micro-business, you can provide specialised services that big organisations do not offer. You can, for example, adjust your services to your customers' needs or create bespoke items based on their choices and wants. You will also have the opportunity to fine-tune your craft and let the quality of your work set you apart from the competition.

Cons:

• Fewer Resources - It can be quite tough to obtain finance to support your micro-business when you first start. There is a chance you won't make a profit with a micro-business, which means most funding and loan businesses will not help because of the risk, meaning their money was wasted and investments/ loans can not be repaid. You may have to rely on your own money to run your business; however, if you can show that profits are generated, you may be able to apply for funds again in the future to help your business survive and grow.
• Higher risk - The ability to turn a profit is a more considerable risk when running a micro-business. This is why it is crucial to make sure you have a solid plan, budget, and foothold within your chosen market to ensure a profit is made.
• More responsibility - You have sole responsibility for everything when you are the single owner and most senior staff member within the company. You will be responsible for your staff and their conduct, making sure they are sticking to their roles responsibly. Small company insurance is available to protect your assets if something goes wrong.

Getting Help with Your Micro-Business

If you have read this information and statistics and now know you are running a micro-business, you can still get help with the running of it and apply for funding with a concierge service. A service like The One World will have a dedicated team to help your business with tasks you may not have the time for or are unsure how to cope with alone. They can advise you on the best ways to run a micro-business and help you with your funding applications, and the best organisations to ask for funding from.