Microbusiness Trends for 2007

Editor’s Note: Last year, Dawn Rivers Baker wrote a guest article here at Small Business Trends outlining the top trends in microbusinesses for 2006. She was kind enough to update her article for 2007, as below.

By Dawn Rivers Baker

Not too much has changed during the last twelve months when it comes to microbusinesses — those smallest of U.S. firms that have fewer than five employees (and most of which have none at all). The multi-year trends we took a look at for 2006 continue to unfold, and there are a few new developments that are worthy of note:

  • Microbusiness numbers will continue to climb in 2007, although possibly not quite so fast. The rest of the 2004 firm size data is due out in March, which will show us that the number of micros continues to grow relative to the total business population. Newly-retired-but-bored Boomers will continue to swell the numbers of nonemployers, a trend that isn’t going to go away as this very large generation just keeps on getting older and better.
  • If the economy gently tanks early in 2007, as many expect, a lot of microbusinesses will struggle with even lower-than-usual revenues and a difficult customer acquisition landscape. However, low operating costs will save many firms from the scrap heap and, as usual, micro-employers will cushion much of the potential shock to the labor markets. This time, though, the Bureau of Labor Statistics will notice and that may, in turn, enhance the inside-the-Beltway image of these tiny firms.
  • After the November 2006 elections, nobody is prepared to pretend it’s going to be business as usual when the 110th Congress convenes. The incoming Democratic majority in both the House and the Senate will bring a renewed focus on low and middle income families that is likely to include more attention for microbusinesses. That’s not to say that Congress will necessarily grow any less clueless when it comes to the difference between policy needs of microbusinesses versus larger small businesses. It is possible, however, that even if they can’t be persuaded to act, they may prove to be slightly more willing to listen … at least for awhile.
  • In the marketplace, look for the financial services industry to be hot on the tail of IT in pursuit of the microbusiness market (even if none of the relevant parties still seems able to make up their minds what they want to call us). The new head of the Senate Banking Committee, Senator Carl Levin, is expected to start making noise about what he calls “abusive” practices in revolving credit lending and the repercussions for micros may be profound. This may be the year that banks finally come up with some kind of micro-friendly form of debt financing that doesn’t involve any plastic, and that may be a direct result of pressure from Capitol Hill scrutiny into the practices of the credit card industry.

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About the Author: Dawn Rivers Baker runs a publishing business focused on the microbusiness market. She is the Editor and Publisher of The MicroEnterprise Journal, located in Sidney, New York, USA.

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ADDED BONUS: To listen to the interview of Dawn Rivers Baker in which she elaborates on these trends, click on the player at the bottom of this post. In the alternative, you may wish to read the transcript of that interview about 2007 Trends in Microbusinesses (PDF opens in new window).

For background, read and compare last year’s article about Trends in Microbusiness for 2006.


Dawn R. Rivers Dawn R. Rivers, an award-winning small business journalist, regularly reports and analyzes small business policy and research as the publisher of the MicroEnterprise Journal. She also publishes research at the Microbusiness Research Institute and she blogs at The MicroEnterprise Journal Blog.

7 Reactions
  1. I just downloaded the pdf file and read the interview. I think American government should have a separate agency or something that specializes in micro business. The government takes decision based on larger small businesses but micro businesses need to be brought under serious consideration. Not every body has the capital or ability to acquire bank loan and start business in an office and hire some employees. Lots of people do business in their garage and kitchen room. Just because they are small does not mean they should be neglected.

  2. My experience dealing with mostly micro internet businesses is that they are thriving during the economic downturn – they typically have very low overhead, don’t need to commute so are less affected by the spiking gas prices, and they are more productive and happier because they work from home typically and enjoy more freedom and work harder. They are more agile and nimble in dealing with change than brick and mortar businesses and are not susceptible to local and regional economic tightness because their businesses typically have a national and global presence.
    David Fairley
    Internet Business Broker