Small Scale Business Ideas: 8 Advantages of Building a Micro-Business Online

Small scale business ideas can help you start a business with big profit potential but small financial risk…

Many startups had humble beginnings in their founder’s garages, including Google, Apple, Amazon, Microsoft, Hewlett-Packard, Mattel, Disney and Harley Davidson. These startups have grown into huge multi-billion dollar companies.

Small Scale Business Ideas: 8 Advantages of Building a Micro-Business Online
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Entrepreneurs and their small enterprises are responsible for almost all the economic growth in the United States.  ~Ronald Reagan

Every major company was once a small business. Although it varies by industry, a small business is defined broadly as a company with 500 or fewer employees.

According to the United States Small Business Association (SBA) Office of Advocacy, small businesses contribute significantly to the American economy:

  • Small businesses with less than 100 employees represent 99% of all employers in the United States.
  • Between 60% to 80% of all new jobs in America are created by small businesses.

Small Scale Business Ideas:  Almost All Startups Begin As a Micro-Business

A small business with less than five employees is considered a micro-business.

Most small businesses (70% ) are owned and operated by a single person — they’re micro-businesses. Only 2% of small businesses are franchises; 54% are home-based.

Virtually all businesses begin as micro-businesses. Many will fail, but some will grow into small, medium or large enterprises. According to Get Busy Media, 69% of businesses survive at least 2 years and 50% survive five years.

Micro-business owners work as solo entrepreneurs, independent contractors, consultants, craftsmen, artists, musicians, writers, photographers, freelancers, free agents and other self-employed people. The majority of these micro-businesses are one-person enterprises operating out of their homes. Many do not have a physical store or office, but are operating purely online.

Solo entrepreneurs running online and home-based businesses are better structured to endure economic downturns and difficult times.

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Compared to other lean startups, micro-enterprises have the leanest operating style. They also have creative business models.

Micro-business entrepreneurs tend to be a do-it-yourself and frugal bunch. They usually find and buy useful information instead of paying for expensive consultants to do things for them. Free and low-cost tools online are often used to simplify marketing and other tasks.

During a tough economy, they usually end up with less financial damage than small, medium and large enterprises. They are in the best position to get out of the recession faster and boost profits.

Small Scale Business Ideas: 8 Advantages of Building a Micro-Business Online

Small Scale Business Ideas:  8 Advantages of Building a Micro-Business Online

  1. Autonomy — Founders retain full ownership and control. You don’t have a boss that tells you what to do. If you are a solo entrepreneur, you can avoid the challenges of having to deal with partners or employees.
  2. Flexibility — Online business websites are running on auto-pilot 24/7 ready to sell to customers anywhere in the the world. You decide when you want to process orders, update inventory, respond to emails and do other business tasks. If you don’t want to process your orders, you can pay a fulfillment company to do it for you. You can always outsource or hire someone cheaply to take care of tasks you don’t like to do.
  3. Minimum risk — You don’t have a big overhead to deal with. You can work at home and avoid office expenses. Instead of buying expensive equipment, you can run your business on a cheap laptop or use a computer in an internet cafe anywhere in the world.
  4. Minimum investment — Some micro-enterprise owners borrow money from their family and friends to start their business. Most solo entrepreneurs bootstrap their business ventures. Micro-enterprises online usually do not require outside investors or funding for years of operating losses.
  5. Low startup cost — You can start an online business with cheap domain name and hosting for your website. You can use also use free blogging sites, such as, blogger.com or wordpress.com. However, it’s better for your business branding to have your own domain name. Instead of getting a merchant account for payments, you can use a free PayPal.com account.
  6. Creative and flexible business models — You can test the waters before you commit to any business model. Many traditional startups fail because the founder is committed to a single idea that is not selling. With an online micro-enterprise, you can test different business ideas and let the customers tell you what they want to buy. Unlike inflexible bigger businesses, you can easily pivot and test profitability of different tiny niche opportunities, such as, golf swing strategies, guitar lessons for beginners, dog training for older dogs, spirituality coaching and fitness training for seniors.
  7. Micro-enterprises can have the ability to scale up in a big way — Many business ventures will fail, but some will grow into small, medium or large enterprises. Online businesses can be operated by solo entrepreneurs because they can usually generate sales and profits on autopilot 24/7. Unlike their larger counterparts, they can scale up without hiring a lot of employees. Instead, many solo entrepreneurs grow their businesses by outsourcing projects to cheap workers in other countries. They usually don’t hire employees until the businesses are well-established.
  8. The power of the Internet allows bootstrap businesses to grow and thrive. Easy-to-use new applications and new technology are constantly being developed that allow micro-business owners to create more satisfying experiences for their customers. They can compete with larger, well-funded enterprises on a more level playing field.
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Most solo entrepreneurs start running their businesses part-time while keeping their day job. Since they’re bootstrapping their business ventures and spending their own money — not investor capital — solo entrepreneurs tend to be very frugal. They typically lay the foundation for their new enterprise and wait until they’re very profitable before quitting their day job.

According to a Gallup survey, 54% of first-year micro-business owners depend on a second job for their personal income. Entrepreneurs who have been running their businesses longer are less likely to rely on a second source of income; presumably because their businesses are more likely to be succeeding. Among micro-business owners who have been in business for 20 years or more, 71% rely primarily on their business as their main source of income.

Although they start out really small, micro-businesses have the potential for significant scale and long-term profitability. Some micro-enterprises have made millions of dollars and others have even grown into huge multi-billion dollar companies.

Small Scale Business Ideas:  Quick Ways to Start a Micro-Business Working At Home

Resources for Starting a Small Business