If you have an entrepreneurial streak but lack the resources to start a traditional small business, you may want to consider starting a micro-business. A micro-business is one that employs six people or fewer. Typically a micro-business requires less than $50,000 to start and doesn’t rely on borrowed capital to get going. Achieving success with a micro-business means taking a different path than most traditional small businesses.
One of the great advantages of running a micro-business is that, because you’re so small, you have flexibility and the freedom to learn from your mistakes. Unfortunately, your size also means that every penny counts, so keeping track of all your expenses is crucial. Completing a profit and loss statement every month lets you see where the money’s going and helps you spot seasonal fluctuations or growth spurts.
Because you’re counting your pennies in a micro-business, avoid spending money you haven’t earned. Put all earnings right back into your business, and hold off on investing in equipment and other major expenses until you’re sure they’re necessary.
As a micro-business entrepreneur, you may find that your clients, many of whom may also be your friends, treat your business as a hobby. They may assume they don’t need to pay you for your products or services and don’t have to enter into contracts with you. Keep everything on a professional basis by treating your micro-business as you would any other business, complete with fair compensation and legal contracts.
One of the keys to success with a micro-business is to produce one simple product or service that many people need. By tailoring your micro-business to something you love, you can create a fun income stream for yourself while improving your clients’ lives. Plus, the lighter demands of a micro-business mean you can keep your day job until it takes off.