The number of small scale businesses is increasing day by day after the outbreak of the pandemic situation. One possible reason behind such a transformation is sudden unemployment and a lack of jobs in the market.
Instead of waiting for the job, people have now started to form small scale businesses. In Ireland, the number of small scale businesses surpassed more than 2.5 billion.
Now, a micro business is a type of small scale business that runs with a minimum number of employees. According to the economic report of Ireland, these micro-companies began to contribute to the welfare of the GDP greatly. This is because it has increased the per capita income of a country.
Therefore, if you have also lost your job and thinking about planning a business with minimal investment, then know everything about micro-business. You need not worry much and begin this business.
Definition of Microbusiness
As per the Small Business Administration (SBA) definition, a micro business is a company that contains a minimum of 1 and a maximum of 10 employees. It can work with such a limited number of employees for a long time. However, the concept of micro-business may differ from one state to another, but most companies follow this universal definition.
Even after having minimum employees, usually, these companies have the ability to earn a huge profit margin. So, if you want to plan a micro-business but worry about revenue generation, you must begin the business without taking any worry. This is because a business person can easily earn more than 30000 Euros per year.
For instance, a small scale micro business company in Vermont has earned more than 25000 Euros in a single year. You will be surprised to know their employee headcount, i.e. only 5. But you should not confuse between micro-business and small scale business, as there is a difference between micro-business and small scale business.
Different Types of Microbusiness
It is not difficult to understand that micro-business is suitable for people who have lost their jobs and very tactfully coping with financial crises. It is a business, so there is no such restriction, and for this reason, even many start-up owners are also showing interest in micro-business. For this reason, nowadays, ample micro business companies have taken place.
- Retail Microbusiness
- Building construction companies
- Small health care laboratories
- Pet care and keeper
- Baby sitter
- House sitting company
- Carpet cleaning company
- Beer manufacturing companies
- Vending machine rental business
- Home-based Baking business
- Jewellery making business
There is far more micro business to name. As micro-business drives out the criteria of the high amount of principle, many businessmen are selecting even large scale business ideas.
Features of Micro-business
You need to arrange a huge amount of funds to begin such business. However, you must also remember one thing: micro-business is no longer different from other medium scale or small scale businesses. Moreover, the beginning of the business is almost the same, and if a person is in requirement of money, he can borrow instant cash loans from the direct lenders of Ireland up to a limited amount.
- Unlike other business types, micro-business also has a structure to get a trading license. One must follow all those norms. Firstly, a company owner must select a business structure such as LLP, LLC, or Pvt. Ltd or sole proprietorship.
- A micro-business also requires a business plan which all the employees must follow. The plan must include required milestones and proper achievable targets for keeping employees work-bound.
- In order to flourish in business, the entrepreneur must plan sales strategies. It is very important to earn a huge amount of profit margin and acquire new consumers. Moreover, a micro-business will not always remain a small scale business. So, with the increasing customer base, the company will also expand.
- Even a marketing plan is as important as any other business type. How can a company compete with other entities without proper advertisement and marketing strategy? Only when a company selects a competitive marketing strategy can it starts even to compete with medium scale companies.
- The employees of these companies merely revolve around 1-10 headcounts. At this point, a small scale company is different from a micro-business. A small scale company has more than 500 employees.
Ways to arrange money for incorporating Microbusiness
Before you begin with this business idea, it should be clear to you that arranging finance for micro-business is quite difficult. However, such difficulties are only applicable to borrowing money. Even it is more difficult to arrange finance than a start-up. Still, there are some ways open to you for collecting money to begin a micro-business. These include,
- A businessman can get a very small amount of loan in the form of cash debt as it is a cash loan, so there is no doubt that the businessman must repay it within a very short period.
- On the other hand, due to a part of a small scale business SBA (Small Business Administration) used to offer a certain amount of loan to these micro-business holders. This type of lending is called micro-lending, and the borrowers are called micro-lenders. Apart from micro-business, SBA also helps many non-profit organisations for the sake of economic development.
Pros & Cons of Microbusiness
There are some advantages as well as disadvantages of forming micro-business. You must analyse both to take a decision.
- There are no such complications in running this type of micro business because the headcounts are minimum.
- It has been observed good possibilities to grow this business in future. Moreover, very good turnover was also observed.
- It is not easy to borrow money when you have planned to begin a micro-business as there are many instances where such a business idea failed.
- You will hardly find employees who will work for the company because of low wages.
Therefore, these are some pros as well as cons of forming a micro-business. If you are also willing to give it a try, you must proceed ahead with this idea after knowing everything.