You may ask yourself, “Exactly what is Dave referring to when he’s talking about a ‘Microbusiness’?” A microbusiness is smaller than the typical definition of a “small business.” It consists of a “mom and pop” type business, a solopreneur, or a company that wants to remain manageable by a small team, often the owner and one or two other key employees.

First, there is something inherently wrong with the term “Small Business.” I’ll explore how a microbusiness is different from the typical small business, and how, if you do have a truly small business, a microbusiness, my book can assist you in both setting up your business and with day-to-day operations.

The Problem With the Term “Small Business”

You would think a small business would be, well, small, but the term “small business” is often a misnomer. It varies according to industry, but, in general, the Small Business Administration SBA) defines a “small business” as “one that has fewer than 1,500 employees and a maximum of $38.5 million in average annual receipts.”

And, in some cases, what qualifies as a “small business” is even larger, as when a business is considered a Disadvantaged Business Enterprise (DBE). I was once competing for a contract with a company that had partnered with an Alaska Native Corporation (ANC). This is part of the proposal that they submitted: 

A project of this magnitude will require DBE partners who are robust, capable, and deep in terms of design/engineering abilities. DBE firms like this are rare, so we are fortunate to have an (Alaska Native Corporation) on our team as our key DBE partner for subsequent phases. This DBE is an Alaska-native-owned company, which allows them to retain DBE status while maintaining a deep bench of engineering staff and other resources. (This Small Disadvantaged Business Enterprise) employs more than 2,000 professionals in more than 40 offices across the United States,  which is remarkable for a DBE.

Really? A business, with over 2,000 employees, is still considered a “small, disadvantaged business”? Not by my standards.

How a Microbusiness Is Different

Instead, my definition of a “microbusiness” is a business whose gross sales are less than 10% of the SBA’s top definition of a “small business.” For example, in my field, environmental consulting services, which is classified under the North American Industry Classification System (NAICS) Code 541620, a small business can have up to $16.5 million in annual receipts. A business of that size can have several hundred employees and multiple offices. Therefore, a microbusiness in this industry, according to my definition, has less than $1.65 million in annual sales, and, indeed, my gross sales have never exceeded that 10%. In addition, instead of employing hundreds of employees, I typically have a staff of 12 to 20 people.

My definition of a microbusiness is as follows: 

• They are typically “Ma and Pa” or small family-run businesses.

• Their gross sales are less than 10% of the NAICS top sales number for that industry.

• They include what I call “parlor businesses,” which are businesses in which “me, myself, and I” are the only employees. You are the entire business all wrapped into one.

With this definition in mind, running a “microbusiness” is an entirely different animal than running a “small business,” and it demands a different business philosophy, different personnel, and different financial management approaches. 

How My Book Will Help the Truly Small Business

Most “small business” books on the market today focus on turning what I consider a medium to large-sized business, the SBA’s definition of a “small business,” into an even larger, multi-million dollar enterprise. This type of book does not help a true small business owner, a “microbusiness” owner, at all. 

To run that type of business, you need::

• Detailed, helpful advice on the mindset and tools you need to start up your microbusiness.

• Resources gathered during my 30 years as a microbusiness owner that I wish that I had access to when I first started out.

• Sample forms and manuals for download to help you create your own business plan and run your day-to-day operations a little more competently and smoothly.

• Cautionary tales of mistakes I’ve made along my road to business ownership and during my years of advising other potential entrepreneurs, written with the hopes of helping others avoid the same mistakes.

A Sure-Fire Microbusiness Guide: From Startup to Maintaining a Truly Small Business is available for download here, and print copies will be available soon. 

A microbusiness is not the same as a small business…..far from it. This book will help microbusiness owners with day-to-day operations and is invaluable to anyone thinking of starting their own microbusiness enterprise.