Number of Microbusinesses Grows

Microbusinesses are the tiniest of small businesses. And their ranks are growing.

A microbusiness (or microenterprise) is a business employing 5 or fewer individuals, with start-up financing needs of $35,000 or less.

The Association for Enterprise Opportunity recently issued some figures on growth of these small businesses. According to its Microenterprises Employment Statistics Report, the number of microbusinesses in the United States grew by 5.9% between 2000 and 2002. Microbusiness employment now account for over 17% of U.S. employment.

Here is a summary chart extracted from the report:

As you can see, the vast majority of these very small businesses have no employees (i.e., they are self-employed).

The report demonstrates the impact of very small businesses to the economy — these numbers are not insignificant. At the same time, the report leaves certain obvious questions unanswered, such as:

  • How much of the growth of microbusinesses was due to the dot com bust and recession of 2001? Much of the growth was among the self-employed.
  • Is this a long-term trend? Will microbusinesses continue to grow in 2003 – 2005 and beyond? Or will some of these mirco-entrepreneurs return to employee status with an improving job market?
  • How many of these microbusinesses are part-time, with the owner also holding down a job?

Regardless of these questions, I recommend you read the whole report. It even breaks down the number by individual state.

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Anita Campbell Anita Campbell is the Founder, CEO and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses.