Microenterprise has become a popular trend due to the amount of great possibilities that come with it. But why exactly is ‘micro’ a good business?
Times are evolving from the once ‘power’ business, as more and more SME’s are taking over the market across plenty of sectors, it’s proof that the size of a business is not important. Due to the small to medium enterprise concept success, it’s about time that there’s a new rival in town in the form of “micro”, in this article we cover why it’s different and why it’s gathering a following in the corporate world.
Why is it being classed as the most humane business scale? Let’s take a look below and understand this concept in more detail.
What is a microenterprise and how does it differ from SME businesses?
Essentially, it’s the idea that a business looks at an innovative idea capable of generating profit based on the least possible infrastructure, and that’s where the “micro” comes into play, small in size, large in possibilities. And of course, we have the recent economic crisis to thank for this shift in concept.
Also, as with most business terms it’s defined by local laws, which may vary from country to country. In the UK, to be able to register your business as a microenterprise you must meet three basic requirements;
Your assets total must not exceed one million pounds.
The net amount of your business must not exceed two million pounds
The average number of employees must not exceed ten.
You may be wondering what exactly the difference between microenterpise and small to medium enterprises are? Although, the size of a company is not important, or the success of it, there are boundaries that define both types of business, and these matter, a lot.
A notable difference is that an SME is a business that has a workforce of less than 50 employees, and has a maximum turnover of 10 million pounds. When you compare this with the above three requirements, the difference is quickly highlighted.
Examples of microenterprises
You may automatically fall into the microenterprise category. Whether you run a clothing store, a restaurant, a barbers, a gym, a small shop … we have been surrounded by microenterprises throughout our business lives, a long time before the law decided to define them so.
If you’re wondering how this applies to the digital era, it’s important to know that you have many businesses that fall into this category surrounding you. Take into account companies that were founded in front of a computer, ones that needed to develop an app to run. Also think about companies specialising in mobile advertising, a type of advertising that needs zero physical support of any kind.
Don’t forget about new business models that exist today, such as ecotourism or mobile businesses (think hot food on wheels i.e. street food). All are great examples of a microenterprise and can be a good inspiration if you’re searching for an idea to begin the business of your dreams.