A micro-business has 10 or fewer employees and is earning less than $250,000 annually. It is the newest trend in business ventures as many people are out of jobs because of the pandemic searching for income. Because of this, most micro-business owners today are independent contractors, freelancers, consultants, and life coaches.
In truth, however, micro-businesses have been around for decades. Many of them are in the social assistance, health care, construction, and retail sectors. Examples of micro-businesses are Etsy shops, home-based businesses, and e-commerce suppliers. And before the pandemic, according to the US Chamber of Commerce, 69% of new entrepreneurs start as micro-businesses.
Step 1: Develop a Winning Business Idea
Start your website and fill out the About Us page. There are many website builders available today that you can use easily and quickly. In just a few hours, you’ll have your website at the ready,
all for free!
It’s important to start with the “About Us” page to help you develop your company’s ideals. It will include your company’s mission and vision statements and your business background. This will help you determine what you want your business to offer and achieve. In other words, writing up your vision and mission statements can help you develop a winning business idea.
Step 2: Develop a Business Plan
With a solid business idea, you can now develop your business plan. While it’s an important document necessary when applying for business loans, it acts as a guide that will help you run your business.
It contains details about what products or services you’ll offer and whether you’ll sell them internationally or locally. It also explains your target market and what they can expect from your business. A business plan also details business expenses, suppliers, and marketing strategies. It has everything that your business is about.
A business plan also explains what type of business entity you’re planning to register your business or its legal structure. This is an important step when starting a business because it details how your
company will be taxed and how it can affect your taxes.
Micro-businesses function the same as small businesses when it comes to taxes. They are taxed based on their registered business entity. To keep taxes for your business fairly easy, you can register your
business as a sole proprietorship or as a separate entity.
If you register it as a sole proprietorship, you can include your micro-business in your tax form, which most or micro-business owners do. You can get personal liability protection if you register it as a separate entity. This means that lenders can’t take your assets if your business fails to earn enough profits or gain too much credit.
However, they can acquire your business and all the other assets and properties that come with it, such as office equipment, supplies, and even your glass office partitions.
Step 3: Apply for a Micro-business Loan
With a business plan in hand, you can now source funds for your business. Unfortunately, because micro-businesses have little cash and assets to contribute, it is difficult to get funding for their startup and expansion. Lenders also prefer businesses that want to borrow large sums.
Thankfully, however, the government provides loans to micro-business through the US Chamber of Commerce and Small Business Administration (SBA). Both agencies can provide up to $50,000 to micro-businesses.
They work with private, nonprofit community-based organizations, called micro-lenders, that provide a few loans. They also know how to develop plans for a micro-business. If you’re looking for further training, they also provide it.
In areas where government-back microlenders are not available, private, for-profit organizations provide loans, but only for specific purposes. Your micro-business can apply for a loan with them if you’re using the money for marketing campaigns, seasonal expenses, payroll costs, working capital, and purchase of supplies or inventory.
Your other options of loan sources are peer-to-peer lenders, credit unions, and local banks.
Step 4: Market and Advertise Your Business
Now you can market and advertise your business. First, however, you need to develop a marketing plan. Don’t start marketing and advertising unless you have a clear plan. Otherwise, you will end up spending a lot, which is not ideal for a micro-business with little capital.
A marketing plan will provide details about how you will inform the world about your new business. The details should include an overview of your marketing goals, a clear definition of your target market, what important metrics will be measured, and the timeline of when goals should be completed. Using this information, you can then plan how to design your website, what social media channels to use, and how to go about your business brand.
Start a Micro-business Today
It’s easy to start a micro-business whether you’re a college student or a stay-at-home parent. If you’re ready, these tips can hopefully help you.