Micro: The Best-Kept Business Secret

Mystique for Pinterest

Some of you know that micro business is the focus of my dissertation. But what you might not know is that nobody knows much about micro business. In fact, business journals have the least information! Micros tend to be ignored, treated like startups, or lumped in with “small” businesses with up to 500 employees.

In research from other fields, we’ve got some demographic details. Not much about who you are or what makes you tick. It’s not that you’re stubborn and secretive; I think it’s just that no one has ever asked.

But I’ve uncovered some of the secrets and they might surprise you.

Micro business is common.

It’s not an insult! You are the key drivers of a country’s economy, whether you realize it or not. The U.S. Small Business Administration (2009) defines a micro business as an enterprise with fewer than five employees. Most other countries (and research) allow for up to ten total people including owners and employees. In either case, for the last few decades, you guys make up about 90% of all U.S. businesses (U.S. Census Bureau, 2015). It’s about the same percentage in other countries, too.

In the U.S., “about 20% of the population has owned a micro business generating a mean gross income of over $100,000 in the past decade (Muske, Woods, Swinney, & Khoo, 2007).” (That quote is straight from my dissertation.) And before you ask, no, we’re not talking about “network marketing businesses”.

Micro business is unique.

Micro businesses are very different from startups and regular small businesses in LOTS of ways. You guys have a totally different set of concerns, motivations, needs, influences, and stressors than owners of startups and larger businesses (Geiger & Noel, 2013; Madero, Paredes, Pérez, Ulibarri, & Quintal, 2014; Turner, Ledwith, & Kelly, 2012).

As an example, you tend to be more realistic in your thinking (Tipu, 2016). You also value the ability to be personally involved with all aspects of your business, reflecting not only different priorities but different personality traits than growth-oriented entrepreneurs (Henrekson & Sanandaji, 2013).

And most of you – 88% – really are happy where you are; you aren’t interested in growth, especially if it means compromising your values and your involvement. The business world assumes you want growth, mistaking micros for startups, because startups tend to get more publicity than they deserve, because that publicity is a necessary ingredient for their launch.

And while you’re not opposed to money, it’s not your only motivator. Your success goals have business folks scratching their heads because you value things like doing work you actually like, having a little flexibility, freedom, and control over your work, being your own boss, getting to know your employees and customers…stuff like that.

They don’t get it, because your goals aren’t goals of larger businesses, so they don’t bother to see what you already have. Seriously! Take a look at some of the content aimed at “small business.” You’ll find links to blogs and articles all over Twitter, Pinterest, and Facebook. And if you read some of them, you’ll see how important things like job satisfaction, employee engagement, and personal leadership are to larger (but still small) businesses. (You’ll also find few actionable tips, but the reason for that is coming up.)

In your business, most of these concepts get applied without conscious thought. For example, micro business owners tend to hire as much for how well someone fits in with the business culture as for how much skill or experience they have. So there’s not much personality clash, which means everybody is just a little more productive and your people feel appreciated and are happier working for you. You treat them like the individual human beings that they are! Larger businesses get caught up in other stuff and have to be reminded of each facet of this concept. You may not be aware of it simply because it’s a natural and intuitive process.

The bottom line?

In terms of research, you’re still a mystery. Aside from some boring demographic information, the little bit of research about micro business that exists has mostly come in the past year or two, from I/O researchers like me.

mystery guy

Obviously, you’re different from other micro businesses in many ways, but you actually have a lot in common with them at the personal level. This means business – and business schools, and the U.S. Small Business Administration, and local “small business” assistance programs – can’t keep trying to apply big-business theories to you and hoping to understand you (Fedoruk & Lumley, 2015). Duh! My hope is that more research will convince them to actually recognize and help you and not their mythical perception.

It also means size does matter. (Sorry/not sorry!) Micros represent a distinct organizational culture that can’t be replicated in bigger businesses. You have what bigger businesses want – an engaging environment, better communication, greater leadership involvement. Unfortunately for SMEs, the most important secrets to micro success don’t scale!

And so, my mysterious micros,

Let me remind you that I’m a fan. I’m interested in your stories, your challenges, and your successes. You are my primary audience and I try to always post content for you. Not just here, but on here on Facebook too. I invite you to stop in, like the page, and feel free to post an introduction to your business! DM me if you have a question or a pain-in-the-butt problem – maybe I can help.

sig black

References:

Fedoruk, L, & Lumley, M. (2015).  The link between emotional intelligence (EI) and cultural dimensions in the context of the micro hospitality sector.  Journal of Organisational Studies and Innovation, 2(3), 49-68.

Geiger, M., & Noel, T. W. (2013).  Head and heart: The influence of emotions on cognitive engagement in a micro-business start up.  World, 3(3), 151-163.

Henrekson, M. & Sanandaji, T. (2013).  Small business activity does not measure entrepreneurship.  Proceedings of the National Academy of Sciences, 111(5), 1260-1265.

Madero, J., Paredes, F., Pérez, I., Ulibarri, H., & Quintal, J. (2014).  Burnout among family micro business owners in Mexico.  International Journal of Applied Psychology4(3), 92-100.

Muske, G., Woods, M., Swinney, J., & Khoo, C. (2007).  Small businesses and the community: Their role and importance within a State’s economy.  Journal of Extension, 45(1).

Tipu, S. A. A. (2016).  Comparing the behaviour of opportunity and necessity driven entrepreneurs.  International Journal of Entrepreneurship and Small Business, 27(1), 84-107.

Turner, R., Ledwith, A., & Kelly, J. (2012).  Project management in small to medium-sized enterprises: Tailoring the practices to the size of company.  Management Decision, 50(5), 942 – 957.

U.S. Census Bureau (2015). Latest SUSB Annual Data. Statistics of U.S. Businesses. Retrieved from http://www.census.gov/econ/susb/

U.S. Small Business Administration (2009). Is your small business a microbusiness? If so, you may be in luck. Retrieved from https://www.sba.gov/blogs

Advertisements

3 thoughts on “Micro: The Best-Kept Business Secret

  1. Yes! When our agencies finally start to count them – especially the non-employer micros – we may have a start at better supporting them. While their best traits may not scale to SME’s, with the right resources, they can keep them and their micro status and still contribute employment…and improved economic benefit.

    1. Adina Wollam, M.S. November 22, 2016 — 9:04 pm

      Thanks for your comment! Micros are being counted, but you have to sift through a lot of irrelevant data from the Census Bureau. They do about 100 different types of counts every year so it’s a crazy amount of work to find the information you want.

      As far as non-employers, I’m sure some of them might welcome support but most of them don’t want to employ anyone or would not easily be able to. For example, a highly skilled artisan can’t just hire a college kid to help make blown glass items. Even if there was an interest, the liability insurance alone would be prohibitive.

      That said, you’re right – the right resources would help! The micros employing just 2 or 3 or 4 people could especially benefit from more support. They often have inadequate resources, which increases costs, which limits their hiring ability. About 75% don’t qualify for loans, either because they aren’t white males or because they only need $10k to $25k rather than the $250k the SBA is comfortable with. With greater support, they could get the resources they need and afford to hire better-qualified employees, and possibly double their payroll. That relatively small amount of support could produce as many as 10 million new jobs. That would be amazing!

What do you think? Leave a Comment!

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Location Maricopa, AZ E-mail Adina@adinawollam.com Hours Monday - Saturday 10am - 4pm MST
%d bloggers like this:
search previous next tag category expand menu location phone mail time cart zoom edit close