The concept of a microbusiness is a fairly recent trend but has become more popular since the onset of the global pandemic. Essentially, a microbusiness is smaller in scope and function than a traditional small business. The governing rules and guidelines vary by state and local authorities, but there are some general characteristics that apply to most microbusinesses.


A microbusiness is almost always a sole proprietorship. A traditionally organized small business may be owned and operated by one person, a partnership, or some other agreement. The microbusiness, by definition, is smaller than a small business and does not require a complex ownership structure. While an article of incorporation will not be necessary for a microbusiness, local lenders may want to see some form of legal document that establishes a chain of accountability for a newly established microbusiness.


Even a small business may have a menu of goods and services that span across different industries or sectors. A microbusiness generally has a focus on just one specific product offering. An individual may choose to offer a certain product or a professional service, but they are generally limited to just one item. In some rare cases, a microbusiness may offer related services but this is not a common practice.

A helpful way to describe a microbusiness is that it is sort of like a subset to a small business. For example, if a small business were to specialize in shoes then a microbusiness might offer shoestrings. The shoestrings could be different lengths and colors, but the microbusiness would only offer that one part of the overall business need.


There is no limit to the profitability or the earning potential of a microbusiness. However, due to the basic nature of such a business entity, micro operations generally earn less than a small to medium sized business. Sole proprietorships are often considered a labor of love and the owner is employed full time within an outside firm. There are special tax laws and implications that govern commercial funds earned through microbusiness enterprises. These guidelines often provide special incentives for individuals who open their own micro or small business locations.