Many people want to start a business, but they feel overwhelmed about the complexities of it. A micro business is a simpler way to start because it is usually operated by one person or a very small team with low startup costs and manageable risk. Some people may call it as a small business, which is somewhat true. However, according to the Small Business Administration, small business can be up to 500 employees. A micro business is a small business, but it is much smaller. Most of them have one to five employees.
The intention of a micro business is to start small, test an idea, and grow it gradually.
Understand What a Micro Business Is and Is Not
A micro business is your opportunity to start with minimal startup costs and focus on a specific product or service. Online freelance services, handmade goods, and local service businesses are common examples of a micro business. The idea is to solve a specific problem for a specific group of people.
A micro business is not your opportunity to start a regional chain of supermarkets nor is it your opportunity to secure millions of dollars in business financing.
Start With Your Skills
I recommend you begin with something you already know how to do. Perhaps, you are skilled in teaching, baking, or illustrating. Instead of trying to invent something new, it is better to use skills that you already have to create a service or product.
Some people are convinced that they do not have any unique skills. You can learn new skills quickly by completing an online certificate program via Coursera or edX. Then, you choose an industry for your micro business and decide if you want to sell a product or service.
Identify a Market Need
The next step is finding people who actually need your product or service. Your micro business should answer the following questions.
- Who needs this?
- What problem does it solve?
- Why would someone pay for it?
The focus is offering a solution that solves a common customer’s problem. If your micro business is a product, you want to have an adequate supply to meet the projected demand. If your micro business is a service, you want to have an adequate supply of time to meet the projected customer demand.
Start Small and Test the Idea
In a micro business, you should start small by selling one or two products first or offering only one service to clients. This approach helps you to improve your focus in understanding what your prospective customers or clients think about your offering. You can use short surveys that appear when the visitor moves their cursor to close the webpage. They can ask some of the following questions.
- What do you dislike about the features of the product or service?
- What do you like about the features of the product or service?
- What questions do you have that has not been answered in the FAQ section?
Alternatively, you can entice your website visitors to subscribe to your email newsletter by offering a helpful resource (an audio, video, infographic, or PDF) that relates to your product or service. Once they are subscribed, you continue to educate them about your product or service until they become a customer or client.
The goal is to learn what is working right before investing more time and money.
Keep Costs Low
As a micro business owner, you want to avoid unnecessary expenses. Some suggestions include (but not limited to) working from home, using free online tools, avoiding large loans, and starting with minimal equipment.
Many micro businesses avoid unnecessary expenses because it is uncertain when they will start making consistent profits. Your initial costs should be limited to satisfying necessary requirements to the government and your business (website, office space, etc.). Any other costs should be delayed until you make enough profit to justify the value that it will add to your business.
Promote Your Business
Once you start your business, the next step is letting people know about it. You can do that with word of mouth, social media, professional networking, and offline print marketing. Often, your first customers or clients will be your family, friends, and/or neighbors. If they are happy with your product or service, you can ask for referrals or create a referral program that rewards them with a one-time commission for bringing you customers or clients.
Grow Gradually
Once the business begins generating income, you can reinvest your profits and expand it. Some possible growth steps include increasing production, adding new products or services, hiring workers, and subscribing to services that can automate parts of your business.
As you grow your micro business gradually, it may grow so much that it exceeds the micro business classification and becomes a small business with hundreds of employees and millions of dollars in sales.
The Final Word
Creating a micro business allows people to be independent, start with minimal risk, turn skills into income, and gain experience in business. Starting small and testing an idea is more important than having a perfectly written business plan. One wise man said to me, “Go as far as you can see, and once you get there, you will see further.” It is an insightful quote that applies in all areas of life, including business. If you take the first step, the next step will appear before you!
In this below video, I speak more about creating a micro business from Western Colorado.