Microbusinesses maximise small resources
One person can take on the world. Microbusinesses, long considered merely the seeds of bigger businesses, are now doing it for themselves.
Characterised by their minute size—by definition, businesses with five or fewer staff—microbusinesses tend to lack the resources of their larger counterparts, however, successful microbusiness owners turn this around through greater innovation and efficiency.
Many of the problems microbusiness owners encounter are exacerbated versions of those small business owners face.
Robert Gerrish, founder and director of microbusiness community Flying Solo, says results from its national survey conducted in May this year showed that the top four things solo and microbusiness owners found challenging were: finding enough business, not delegating, doing too much, and getting the business model right.
Building business
The first, finding enough business, he says is a concern because many microbusinesses tend to be service businesses, “although increasingly many of them do now sell products as an adjunct to their service”.
This challenge also relates to cash flow, “having enough steady money”, notes Gerrish. “Microbusinesses tend to have a higher per household income than other businesses but they are constantly worrying where the money’s going to come from.”
When a microbusiness decides to get into export, these gaps can be harmful, he warns. “Finding the next client is exacerbated when microbusinesses go global. Whether you’re going global or going to the next suburb, if you have a crack in your foundation it will show up. The thing with going global is that it will show up very quickly and will be magnified and accelerated.”
Gerrish’s advice is to ensure that you have a solid foundation of business, whether that’s a few key domestic clients to keep the work and the funds coming through, or at least a firm plan of action for your international foray. “Make sure you have all your ducks lined up, know exactly what you’re doing,” he says.
“I’ve seen people who’ve grown too fast, they’ve gone global and the next thing you know they’re hiding under the desk: they haven’t learnt to handle tax issues or never thought they’d have to spend all night in their garage packing boxes. There’s quite a lot of naivety around exporting: ‘I’ll put a website up and just watch the money roll in’.”
Much of this comes down to minimising inefficiencies in the business prior to going global. “If you have inefficiencies in a small business it’s hard for someone across the world to accept that,” he says.
“It’s important to get it right, particularly when someone is buying from overseas they’re not going to be as assured as they would be if it were someone else in their own country. You have to overdeliver in terms of your service and your guarantee in all these things. If you stuff up once, if you’re not careful, that could really mess you up.”
However, this is not to say that you can’t start small when exporting. After all, microbusinesses are well known for their ability to try new things more easily than bigger businesses.
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