Here is how the term microbusiness–and related terms–are being defined.
Number of Employees in a Microbusiness
According to the Sam’s Club/Gallup Microbusiness Tracker, a microbusiness is defined as “a business with five or fewer workers.” AEO defines it the same way (see image “Bigger than You Think“) but adds “including the owner.” Wikipedia, however, identifies a micro-enterprise as a “small business employing 10 people or less.” Wikipedia has an international slant, which may account for the difference. This entry also attempts to distinguish between microbusiness and the related term microenterprise, which “have the same meaning, although traditionally when referring to a small business financed by microcredit, the term microenterprise is used. Similarly, when referring to a small, usually legal business that is not financed by microcredit, the term microbusiness is used.” (Note: Wikipedia isn’t the most viable reference; it can be updated by anyone. It doesn’t represent a comprehensive, unbiased view of this topic. We use it here only to make a comparison and open the floor for further discussion.) For more specific information about microenterprise, the impact of microloans in the U.S., and the microenterprise development programs that support these businesses, visit the Microtracker.org and its Field Trendlines Series Issue 8 (May 2015).
Financial circumstances for microbusiness are improving. Quarterly reports throughout 2014 show less need for entrepreneurs to dip into their personal saving and/or struggling with cash reserve. (Source: Sam’s Club Report – The State of Microbusiness in 2015. A Year in Review)
The Sam’s Club/Gallup Microbusiness Tracker study of microbusiness owners is conducted quarterly. At the beginning of 2015, the research reported that microbusiness owners are starting the year “in higher spirits and with higher expectations than one year ago.” According to the Vistaprint Small Business Happiness Index, 77% “report being happy or extremely happy that they work for themselves.”
Reason for Being
Here are noteworthy reasons why microbusiness owners started their businesses, according to The State of Microbusiness in 2015. A Year in Review:
- 1% of business owners said it’s always been a dream of theirs to start their own business.
- 7% of microbusiness owners were motivated to be their own boss.
- Only 18.4% chose to start a business due to lack of desirable job options. This is more attributed to sole owners (20.8%), than those with employees (15.6%).
Now It’s Your Turn . . .
Based on these defining factors, do you (or would you) refer to yourself a microbusiness owner? Why or why not? Does it have implications you don’t like? Is this terminology confusing for entrepreneurs or sole proprietors in defining their businesses? Does your sentiment match the research? What ideas do you have on the subject? Feel free to contact us with your thoughts, or leave a comment below.