Micro-Businesses - Why are they still under the radar?

We hear about small businesses being critical to the health of our economy, but it seems that the real action may well be taking place in the Micro-Business sector.  Since I am right up to my eyeballs in at least one micro-business, I am going to devote a few posts to this interesting phenomena.

A micro-business is one which does less than $1 million in business per year. The majority of these business are home-based businesses (HBBs)and they make up an unknown percentage of the small businesses that are tracked by the Small Business Administration.

I have not been able to find recent micro-business figures for the entire US yet, but in the pre-internet days of 1992, home-based business contributed $314 Billion dollars, or 11 percent to the economy.

With today's internet tools and online payment systems like PayPal, a micro-business can do business as easily as any large corporation. I wonder if the micro-business sector might not be contributing as much as 18% of the economy this year?

For more recent reports you can see how important the micro-business sector is in Arizona, Texas, and Australia and more in Australia.

One of the most interesting indicators was this article about American Express making inroads in the micro-business market. If there is enough of a market to interest AMEX, the micro-business sector should be hitting the radar soon.

This could provide some satisfaction to some of my blogging friends who already operate micro-businesses. On the other hand, running a micro-business is much like blogging. You do it because it's important to you or you feel compelled to do it. It's not something you feel like bragging about.

Next post - What is driving the growth of these micro-businesses? The reasons are fascinating.

Comments

[Teller]

Good identification...you can make 50 million a year and still be called a "small business." Micro fits better.

We're growing because the cost of doing business is falling, especially for a software guy like me. A fast dedicated server for $500/month? Unthinkable 10 years ago. Unthinkable! I thank Moore's Law, but even advertising is so much easier now with the Internet. These are good times.

[Lloyd]

I ran a kitchen-table business back in the days when you tried to hide the fact that you were so small. Today, we're finally starting to get the respect we deserve. Micro-businesses leveled the playing field for thousands, if not millions, of business people. Today we have our own publications, associations, and lenders willing to loan as little as a few hundred dollars to someone with a plan and the desire to be self-sufficient. I remember, when I was a young guy, being laughed out of the bank for such a request. Yes, we've made progress, but we still have a needs list; affordable health insurance comes to mind.