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What is a Micro Business?

What is a Micro Business?

According to the UK Gov, in 2019, micro-businesses accounted for 96% of all businesses in the UK. That’s around 5.6 million businesses! Micro businesses are sometimes described as the ‘backbone’ of our economy. So much so, that in In 2017, the UK had the 4th most micro-business dense country in the world, with 81 micro-businesses for every thousand people.

 

But with such large numbers, what exactly *is* a micro business?

 

Well, first, it is defined by the number of people who work for the business. In the case of a Micro-business, this is nine employees or fewer. They are a vital part of both growing the economy, especially after lockdown, but also, vital to the community. They provide both products and services. They are our cookery classes, our exercise classes and our dance instructors- they are even the community spaces in which these are held. Need the plumbing sorted in that space? Its likely a microbusiness will be coming to your rescue.

 

But, not all micro-businesses are alike. We often generalise the term to encompass all kinds of businesses, especially when we look at facts and figures. But this does not necessarily paint an accurate picture.

 

What kinds of businesses make up the microbusiness landscape?

 

Self-employed

 

Possibly the first thing many people might think when we use the term ‘micro business’. A person who runs their business for themselves, and is the person responsible for its successes and failures would be self-employed.

A self-employed business can be a person’s primary source of income, or could be a secondary source. For example, by working for an employer during the week, and running their own business at the weekend.

 

Being self-employed can be attractive. You can set your own hours to work around your personal life, or other commitments, and have total creative control on the direction your business takes. According to the ONS, from January to March this year, there were 5 million self employed people in the UK.  

 

Home business

 

Technology is moving fast. Particularly over lockdown. It is believed that the UK achieved three years worth of innovation during the three months of lockdown. Wow!

With this technology, more and more people are able to stay connected, and start a business at home. From social media entrepreneurs, to business on sites like Esty, more and more people are choosing to work in a home business. Running a business from home gives flexibility of your working space, reduces overheads and costs, and can allow you to grow the business at your own rate.

 

 

Family Business

 

‘ … and Son, since the year dot’. Family businesses are probably one of the oldest ways in which to organise a business. They are defined as any business with two or more members of the same family involved, with a major ownership. We see family run businesses across all sectors; from the hospitality to manufacturing trade. However, working with family can have its ups and downs. There have been cases where some businesses do not leave their disagreements at home, or vice versa!  

 

Start-up

 

A young company, right at the start of its life. Some might have funding, and others search for it to expand their services and products, or to expand the team. Some business grow bigger as their business gains success, where as others prefer to stay small. Every start up is different!

 

In many reports, micro-businesses are placed together, in a similar manner to Small Medium Enterprises (SMEs). However, this does not necessarily do them justice. It is a very varied part of our economy, and a very welcome one! Be it working with the family, or by yourself, the microbusiness is here to stay. Thank goodness!