Micro Business vs Small Business
Micro Business vs Small Business – Is there a difference in Australia?
As more and more people delve into the world of being self-employed we can look at the different ways there are to classify ourselves as business owners.
- Solopreneur – Includes terms like Mumpreneur and Dadpreneur and is a person who sets up and runs a business on their own.
- Entrepreneurs – While any business owner can be deemed an entrepreneur it tends to align with a startup type of mentality. A start-up is looking for funding, fast growth and a fast sale to a multinational. However, it also has fast failure too!
- Small Business Owners – This tends to encompass anything from a non employing business (solopreneur) through to a business with up to 20 employees. It also covers the term micro business with 0 to 4 employees.
How do you classify yourself?
Typically a micro business has one to four employees. While there may be an interest to grow to a much larger entity, they tend to choose to stay small.
Micro business owners are comfortable with the size of their business and may stay the same for the life of their business. This can provide the ideal work/life balance and a far larger income than if the owner were to work for someone else.
The work/life flexibility and depending on the type of business it is often one that can be done from various locations. Thank you technology!
A Micro business owner and their staff (if they have them) tend to be Jack-of-all-trades. This means they are capable of doing everything, from sales and marketing through to the admin for the business. They are experts in their field but also need to look after many other aspects of running their business. For the business owner, this provides them with variety and control over their business.
Are you thinking about starting a micro business?
Micro Business ideas
Freelancers – Across a wide range of industries freelancers are helping other businesses. From graphic designers to trainers and more freelancers cover a wide range of offerings.
Virtual Assistants – While there are many things that can be offered as a virtual assistant many VA’s tend to offer specific a speciality. This may be admin support, answering the phone or helping with marketing and more.
Bloggers – Writing for yourself within a niche is a great way to have a flexible micro business. It can take quite a while to get a business like this going but the rewards and lifestyle it creates can be highly flexible.
Writers – Producing content as a writer for others or for yourself.
Tutors – Not just for kids, there are many things that can be taught.
Consultants – Do you excel at something that others struggle with?
Dog walkers – For a fee, you can be getting exercise and growing a business. More and more dog owners are outsourcing this to keep their pets busy while they are working.
Pet sitting – Pet owners often prefer to leave their pets at their home while they are away. Pet sitting is a business with plenty of demand.
Ecommerce – One product or many, selling online can create a micro business. Online stores are more relevant than ever and just like any other business, it takes hard work and dedication to get your business noticed online.
Cleaning services – Are you great at cleaning? As we all lead busy lifestyles the outsourcing of cleaning is just one of those tasks that can be done by professionals.
Handy Person – Not everyone can fix things, or build flat-pack furniture.
DJ – Hire your self and your skills out to parties and events.
Delivery driver – Uber, Deliveroo, and so many more.
Fitness trainers – Are you qualified, why not work for yourself. One to one training or group training outdoors is incredibly popular.
Makeup Artists – Weddings, events, TV and more can use the services of a makeup artist.
PC Repairs – Know everything there is to do with computers? You can help others.
Hairdresser – A small salon is often a micro business. Plus you have the option to be mobile as not everyone wants to travel to a salon, mobile hairdressers are in demand.
There are so many more types of businesses that fit perfectly into this category – mechanics, window tinters, painters, gardeners and the list goes on…
While small business as a label covers many different businesses it is best classified as employing 5 to 19 people and with a turnover of $2 to $10 million.
According to the ABS – Australian Bureau of Statistics
The Australian Bureau of Statistics (ABS) defines a small business as a business employing fewer than 20 people.
Categories of small businesses include:
- Non-employing businesses (sole proprietorships and partnerships without employees)
- Micro-businesses (businesses employing between 1 and 4 people including non‑employing businesses)
- Other small businesses (businesses that employ between 5 and 19 employees)
According to the ATO – Australian Taxation Office
The Australian Taxation Office (ATO) uses a different definition of small business. According to the ATO, a small business entity is an individual, partnership, company or trust that is carrying on a business and has less than $2 million in aggregated turnover. Aggregated turnover is the annual turnover from current business and an annual turnover from other businesses that an individual is connected or affiliated with.
Note that a business that has less than $2 million in turnover may have 20 employees or more while a business with fewer than 20 employees may have a turnover that exceeds $2 million per annum.
The ATO also define a micro business as having a total business income of less than $2 million while a small business has a business income of between $2 and $10 million per annum.
At the end of the day, it does not matter how you classify yourself small or micro business we are all just doing our best and working hard. You may have to work harder in your small business than you would for a boss but the rewards are endless.
Personally, I would not swap being self-employed. Even on the stressful days, it is still better than doing a 9 to 5 for someone else.
What do you think?