The Rise of the Microbusiness: What You Should Know

They’re not quite startups but definitely not huge—though there's a huge number of them out there. Microbusinesses and the economic micro-boom they’re creating are something you should keep an eye on, say two associations in the industry.

Maybe it’s a side project that fulfills a major interest. Maybe it’s a consultancy. Maybe it’s a business that doesn’t need a lot of employees to enjoy profitability.

Whatever it is, it’s picking up steam, according to an association that represents the microbusiness industry. More details:

So what’s a microbusiness, anyway? According to the California Association for Micro Enterprise Opportunity (CAMEO), microbusinesses are those that begin with less than $50,000 in startup capital and employ fewer than five people. That accounts for around 88 percent of U.S. businesses. “If one in three Main Street microbusinesses hired just one employee, the country would be at full employment,” Connie Evans, CEO of the Association for Enterprise Opportunity (AEO), a national microbusiness group, told the San Francisco Chronicle earlier this month.

Where the growth is: Basing its findings on an analysis of data from the Small Business Administration, CAMEO notes that businesses with fewer than four employees produced a net gain of 5.5 million jobs between 2004 and 2010—a period when businesses with more than 500 employees were responsible for a net loss of 1.8 million jobs. While the economic scale of these businesses is smaller than your average Fortune 500 company, the entrepreneurial potential is strong, says CAMEO.

Getting association help: Both CAMEO and AEO are working to support these  businesses though development initiatives. AEO has launched its Catalyst Initiative, designed to aid small-scale businesses with capacity and resource allocation with the long-term goal of helping them hire another employee or two. CAMEO, meanwhile, has a joint effort with the micro-lending startup Kiva to help small businesses with their crowdfunding efforts. The project began in 2013, helping businesses that are otherwise unlikely to receive a loan get a smaller scale one.

This raises an interesting question about what might constitute an association member in your industry. For microbusinesses striking out on their own, having a support system in a larger organization could prove immensely valuable. How are you making room for these small-but-important parts of the job market in your organization?

Let us know your take in the comments.


Ernie Smith

By Ernie Smith

Ernie Smith is a former senior editor for Associations Now. MORE

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