Microenterprise On The Rise

Here’s a quick, one-sentence pop quiz to test your entrepreneurial noggin (no cheating!):

Micro-enterprise makes up _______ of all businesses in the U.S.

A) About 40%
B) About 90%
C) About 60%

Let me give you a hint: micro-enterprise is a relatively new term used to describe businesses operated by under five people, with a start-up capital of $35,000 or less.

Basically it’s another term for TPE, because none of us scrappers had anything remotely like a fat line of credit courtesy of a rock star venture capital firm. (Try few credit cards and that $20 bill Grandma slipped in your birthday card.) And most of you probably don’t have more than five employees, either. (Paying your friends in pizza and beer does not qualify them as staff, no matter what their T-shirts say.)

So what’s the answer to the quiz? How many creative, tough, valiant entrepreneurs (like you) are there running businesses in this great country of ours? The answer is B, almost 90%! The Association for Enterprise Opportunity (AEO) estimates that 87% of all U.S. businesses are micro-enterprises, more than 24 million! Holy crap! That’s a lot of TPEs!

The rise of the micro-enterprise is in part due to the advent of the Internet, which makes launching and running a business easier, faster, and more economical—and gives entrepreneurs access to the worldwide marketplace, without having to go through big business distribution and marketing channels.

The Internet requires fast change—think the rise and fall of Juicy Campus, the impending extinction of MySpace, and the speed that Twitter took off. Now look at all of the businesses springing up overnight that build off of these trends. Only micro-enterprises can leverage these opportunities.

In the wake of the big business failures and bailouts, it’s not hard to see why micro-enterprises outnumber giant corporations. Entrepreneurs who started with pocket change know how to run lean businesses. They also come up with brilliant innovations because running a micro-enterprise demands creative ideas and solutions. And they don’t need to create and follow complicated policies or procedures, allowing their business to flourish under off-the-cuff management and respond to industry trends quickly.

So, despite the fact that you may feel like you’re perpetually sitting at the kid’s table, you’re actually in the majority. Take a moment to revel in this realization, that you are part of a larger, ascendant group of entrepreneurs that have taken over the U.S.

World domination is only a heartbeat away!

By Mike Michalowicz, Author of The Toilet Paper Entrepreneur