No – I’m not blogging about tiny toys. I’m talking about MICROBUSINESS or micropreneurism or solo professions or whatever you want to call them. I read an interesting fact sheet (from 2013, but still relevant!) that said that in the US, there are 22 MILLION small business owners who are just themselves – self employed with no employees – who contribute more than a TRILLION dollars of economic activity. Now, if we do a straight arithmetic average, that means that each of these micropreneurs is making about $45,000. Not a great dollar figure, but not too bad either.

But – only one out of three microbusinesses generates more than $25,000 per year. So let’s do the math. That means that 14 million micropreneurs are not making a living. So they account for (at most) $363 BILLION of the trillion dollars. And the OTHER 7.5 million micropreneurs are responsible for bringing in $637 BILLION, or about $85k each. 

So – now that we have a little background on micropreneurs and who we are – let’s talk about challenges facing these markets. And I’d like to split out the financially viable 7.5 million of us from the 14 million who aren’t there yet. There are a lot of challenges facing each of these markets, but I’m going to focus on the 7.5 million whose companies are foreseeably going concerns right now (future blog post coming on the challenges facing the other side of the equation). And I’m talking directly to you, those business owners who have gotten over the hump and crossed over to sustainability.

When you have a microbusiness – there are a few major questions that you have to consistently ask and answer when you are thinking strategically. First – and this is culturally significant – do you want to ever-ever-ever scale beyond the single life? Many construction workers, web developers, massage practitioners and others just don’t. And that’s cool. The main business challenge that I have encountered for this level of micropreneurs is that they simply don’t know how to make the business part run. When you don’t want to hire anyone else full-time, even the time that it takes to look for service providers can become overwhelming.  Here’s a hint – YJC can do that for you. Vetting and vendor management can be a time-sink, taking you away from the thing that actually pays you money.  Another thing which solo professionals have to deal with is the administrative side. Whether it’s creating templates for proposals or actually getting the financials to your accountant, it all takes time. One of the things that YJC can do is develop procedures which are easy to follow and eliminate duplication. So often, the software can do things for us that we have been doing manually because we’ve always done it that way. A second set of eyes can help find those redundancies.

The second question that microbusinesses need to ask themselves is – whether or not I want to scale beyond myself, how can I align my capacity for work with an income level that supports me? Once you have established a successful practice, it can be daunting to raise your rates, or take a step down from doing everything for yourself. (Yes, YJC can do capacity and feasibility studies). If you do want to scale beyond being a solo practitioner, we can work together to build a road map to achieve that goal.

Finally, microbusinesses need to make sure that they are managing their risks appropriately. As a solo business person, your risks are very different from those of even a slightly larger enterprise. It becomes less about transparency (all the pieces are transparent to you!) and more about catastrophe mitigation. If you were incapacitated, would your partner know how to get in your email? Or contact your client base? Or when you do want to quit what you’re doing, can you survive? Have you got a solid financial plan for retirement? (YJC cannot help you with this. But I can help you with continuity and risk management.)

I’ll write in a further installment about what to do if you DO want to expand, and separately about those businesses who are not capable of expansion because they’re not sustainable. But in the meantime, contact me if there’s anything you need to talk over.