Tag Archives: self-employment

The Future of Micro Businesses

The Industrial Age has long been relegated to the history books, and now the Technology Age is getting pretty long-in-the-tooth and is rapidly winding down.

So, what do we have to look forward to?

Well, the groundswell of information and media attention appears to point towards an Entrepreneurial Age, where a proliferation of Micro Businesses seems to be creating a lot of buzz.

What is a Micro Business?

There is no simple definition for this category of business, because most countries and many agencies within those counties all have different standards and definitions of a micro business. Depending on who you talk to, a micro business can have anywhere from 0 to 19 employees; sales under $2 million; or assets under $2 million.

In fact, there is even no agreement on how to spell the term! It appears that micro business, microbusiness, and micro-business are all the same as micro enterprise, microenterprise, and micro-enterprise.

Take your pick—but I’ll stick with “micro business” just as we all now write “small business.”

In addition, I’ll put forth my own definition of a micro business as: Any business with only a “few” employees—or none at all.

I use this definition because well over 90% of micro businesses have NO employees, while there will be others with one employee that has more revenue than a similar business with 10 employees. So I’ll stick with “Any business with only a “few” employees—or none at all..”

 

Man in Hardhat

Is the Entrepreneurial Age a Good Thing?

There have been micro businesses around for longer than recorded history, but they have always been in the shadow of big business, governments, and big money. Now, the big businesses have left the developed nations and are concentrated in the industrial developing countries.

Big money organizations pretty much invest in each other, and various governments are floundering in disarray. That is why more and more unemployed, underemployed, and unhappily employed people are turning to the creation of micro businesses.

Various media pundits, and business “experts,” gurus, policymakers, and elitists consider all these micro businesses to be a form of self-employment and therefore should be summarily dismissed. Micro businesses are totally misunderstood by these groups.

This attitude is one of the things that so greatly contributes to the large number of failures by these smaller small businesses. They struggle all alone with little or no help from … anyone.

In spite of all the disdain by the business community and the government, one in 7 adults in the U.S. own all or part of a microbusiness. Businesses with no employees, alone contribute over $1 trillion to the GDP.

*  *  *  *

The Entrepreneurial Age is here, and the sooner the policy-makers and business “experts” of the land understand this, the sooner we will see more and better support for these small businesses—along with a strong boost to the economy.

What Is Your Opinion?

Am I alone in believing this, or do you share the idea that we are in the early stages of an Entrepreneurial Age? Or, might this just be a temporary condition that will decline as soon as the economy gets back on track?

###

American Capitalism?

It seems the U.S. has, for quite some time, prided itself in being the true Capitalist nation of the world. With relatively low taxes, fewer government controls, and that indomitable American spirit of freedom, entrepreneurs have a free rein to start whatever business they want in the U.S. This is the land of opportunity, and that is why we lead the world in entrepreneurship—right?

Sadly, the above comments appear to be part of a giant myth. John Schmitt and Nathan Lane, of the Center for Economic & Policy Research published a paper in August declaring that the U.S. ranked second to last out of 22 countries in the ratio of self-employed workers to the total civilian workforce. Not surprisingly, the U.S. also appeared near the bottom for workers employed in small-business manufacturing. Much more surprising, was that the U.S. was also near the bottom for computer related services.

Here are a few comparisons of self-employment as a percent of total civilian employment, as published by the Organization for Economic Cooperation & Development:

  • Greece – 35.9%
  • Spain – 17.7%
  • Britain – 13.8%
  • Germany – 12.0%
  • France – 9.0%
  • U.S. – 7.2%

Of course, when throwing big corporations into the mix, the U.S. fairs much better, but what does this say about small business being the future of the American economy? What does this study say about the role of American small business in any part of our future?

So, what has happened to the entrepreneurial spirit in the U.S.? Why are our European and Asian neighbors beating us at our own game? Have we become so used to living the easy life, with cheap and abundant credit, that we no longer want to work the demanding regimen of the small-business entrepreneur?

It takes guts, passion, persistence, and very hard work to become a successful small-business person today—and it now appears that America has a dearth of people with these attributes.

What has happened in America…and can we retake our former position as a world leader in small business Capitalism?