What percentage of businesses are microbusinesses?

Written by Willem Gous

Tuesday, Jan 10


I’m going to talk about micro-businesses and what percentage of businesses in an economy is usually micro-businesses, and then also look at the economic contribution that they make. I’m going to look at micro, small, medium, and large, so you can see where microbusinesses fit in and the potential they hold, not just for job creation but for growing an economy rapidly.

There’s very little data surrounding microenterprises, and usually, they’re bunched with small enterprises, and everything just looks massively cool. I got statistics from North America and the United Kingdom, and it’s very revealing.

Before we start, you may want to revisit this post about microbusinesses. As a quick refresher, the simple definition is less than 10 employees with annual revenues below $300,000. Now in my books, that is a damn decent business.

If I have five employees and I’m doing a quarter of a million dollars a year, that is an excellent business. But let’s start with North America. In North America, 92% of all businesses are micro-businesses. Think about that again: 92%. So small, medium and large only makeup 8% of those businesses in America. Micro-businesses create twenty-six million direct jobs. That is massive.

Now, let’s go over to the UK. There, they define microbusinesses as private sector businesses in the UK by number of employees 0 – 9, including the owner.

There are 5.2 million microbusinesses in the U.K. That is massive. The total percentile of all businesses in the U.K. is 95%. That is impressive. A hundred per cent of microenterprises account for 32% of all employment, which is huge.

But now you look at those businesses categorised as small with 10 to 49 employees. There are only 217,000 as opposed to the 5.2 million in micro. Medium size businesses, 250 to 49 employees, you’re looking at 36,000. Now large businesses, 250 employees and more, you would think there’s a lot of them, but according to this, there are only 8,000 of them. Though they’re only 0.1% of all the businesses in the UK, they create 39% of employment. So the biggest employment creators are the large businesses. Second, to that is your microenterprises, and then third is your small, your 10 to 49. And then lastly is your medium enterprises.

Let’s also look at the turnover. According to this UK study, microenterprises create £808 billion in turnover, but the biggest one is still the large category with £2 trillion. So number one, £2 trillion, large companies second is microenterprises with £808 billion.

Then comes medium enterprises at £708 billion. And then lastly, small businesses with £609 billion. So why am I hammering away at this? Oh, we should look at small enterprises. Don’t we have enough? We think small businesses create employment, and there’s nothing wrong with that. But a microenterprise creates self-employment as well as other employment opportunities.

If you want to create employment for thousands of people immediately, you need to create thousands of microbusinesses. And that is simple to do because, with microbusinesses, the startup costs range from nothing to very low. Maybe they require a little money out of pocket, but it’s not that you have to go and get offices and apply for funding. I can start this business.

Now in an African context, I always say, well, if you don’t have employment if you don’t have money. Start a business today! You will eat tonight. And that is a very big step for somebody with no income or no grants or social support structure.

And that’s why micro-enterprises are essential. If you look at our program, we can create hundreds, even thousands of these per month. That’s our secret sauce. We reduced the cost of job creation almost by 10 times, as well as the time of job creation to five weeks from the typical 12 months of traditional training.

Now we can uplift people and change and shift economies because if I create a hundred microbusinesses within a community. That means a hundred families are feeding themselves and now actively participating in the local economy, which has further knock-on effects, which grows that economy, and so on. That goes much further than the turnover amounts that I just mentioned.

I hope you found this very enlightening. If you create large numbers of entrepreneurs or jobs within your country, speak to The Human Entrepreneur. We are the absolute experts in this sector.

If you need to develop entrepreneurs fast then reach out to us and discuss your specific needs.

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