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How are microbusinesses unique?

Updated: Sep 5, 2022

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The U.S. is experiencing a microbusiness boom

A few months ago, I ran across a Brookings Institute report titled "Microbusinesses flourished during the pandemic. Now we must tap into their full potential." There's a lot of overlap between microbusinesses, solopreneurs, family businesses, home-based businesses, digital nomads, small businesses, and freelancers. Wikipedia notes that, in the United States, microbusinesses are defined as having five or fewer employees. The Brookings Institute report clarifies the term online microbusiness and notes the high rate of growth for this business category:

Online microbusinesses are defined as businesses with a discrete domain name and an active website. About 90% of these online businesses employ fewer than 10 employees, and nearly 17% of the 20 million microbusinesses tracked in the U.S. were started after the onset of the pandemic.

At Tao Websites, we're proud to be a microbusiness that helps other micro and small businesses. Here is a difference, a benefit, and three challenges of microbusinesses, from my perspective:

Difference: Social Interaction

I spend more time alone, or with my one colleague, now that I work at a microbusiness. It's critically important that our small team coordinate, communicate, and push ourselves and each other to grow professionally. Social skills are also key in providing excellent customer service. Some microbusinesses may be intensely social: Food cart proprietors, for example, may interface with people all day. Microbusinesses are ideally suited to people who can work well with clients yet want a high degree of control and responsibility in their work environment. A potential downside is that you have fewer colleagues to rely on. Some employees of larger organizations value the stimulation and security of larger social groups. Microentrepreneurs must be, well, enterprising, and develop their own personal and professional network.

Benefit: Opportunity

In a microbusiness, there is not a complex social hierarchy or rewards structure. You are rewarded for creativity, foresight, and ability to exceed your customers' expectations. Flexibility is a key value: our business model is flexible, and nimbly adapts to the needs of our clients. In return, we get more personal flexibility and autonomy than is currently available to employees of most larger organizations. Indeed, the Brookings report notes that the entrepreneurs driving the current spike of microbusinesses are from the demographics hardest hit by economic and work conditions during the pandemic: women (57% up from 48%), Black people (26%, up from 15%), and people without a college degree (44%, up from 36%). More people are realizing that they they have something of unique value to offer their communities and the world. One of the most rewarding parts of my job is helping microbusiness owners launch their website, since many of us don't have a literal "front door" to celebrate with a ribbon cutting.

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Microentrepreneurs must develop their own networks

Challenges: Networks, Funding, and Knowledge

The Stanford Social Innovation Review argues that microbusinesses are great for communities, but sadly more prevalent in wealthy areas:

Microbusiness formation is highly local, owners rely heavily on local financial and network resources. Poor communities often lack these critical local resources, preventing promising micro-entrepreneurs from succeeding, and robbing communities of the benefits of the ideas and efforts of thousands of promising entrepreneurs.

Even though there are many types of online microbusinesses with low startup costs, our communities would benefit from more people having access to the funding they need to implement their ideas. Our microbusiness also relies on our local community's stable infrastructure--like high speed internet and library access.

Finally, more information is needed. Microbusinesses need to be studied more, both so governments can create more equitable and supportive policies, and because market research is key to understanding the unique needs and advantages of these special businesses. Microentrepreneurs tend to be people who seek new information, connections, and knowledge. We succeed by finding gaps in current services and unmet customer needs. As we go, we must wear a dozen hats and learn how to do new things each day, from buying software to choosing logos. I don't know about you, but I can't imagine learning how to do all that before the internet! Successful microentrepreneurs also cooperate with each other and outsource tasks that are outside our wheelhouse. If your microbusiness needs web design, marketing, or microbusiness consulting, please don't hesitate to reach out to us. We're flexible, just like you :-)

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