Columnist . Ron Wacks  


Part Two

You’ll read about Microbusiness as a demographic…

a market, and a constituency and as the largest business demographic in the US economy—95.8% of all US firms

We’ll cover Micros in the context of history, issues of the day, economic development, job creation, innovation, entrepreneurship, start-ups, defining success and sustainability, the Microbusiness “gender”, and international engagement. Think of Microbusiness as the “merchant class” of the last 3,000 years.

In Part One of this piece, I talked about the Small Business and Microbusiness “Grand Canyon”, that the differences between US “Small Businesses” and US “Microbusinesses” are Grand Canyon-like. Beyond the definitions of each, there are basic characteristics that define the differences between Microbusinesses and larger firms. First, there are specific reasons why Micro owners started their businesses—their priorities and how they define success. So, let’s look at the top 5 priorities of US Microbusinesses according to our research going back to 2002.

That top 5 tells the tale. With larger firms, particularly giant publicly held firms, their #1 priority is revenue. Many say that all five of their top 5 priorities are revenue. After asking tens of thousands of Microbusiness owners their top 5 priorities—that also largely define success for them, guess where “revenue” landed. If you guessed “#5”, you are correct. And it was characterized as a common theme.

The top 5 were:

1) Flexibility of schedule—the desire to do whatever it is when I want (to allow for other priority activities and needs)

2) Creative control—the control over the quality of all aspects of the business and deliverables

3) Financial control—the control over spending decisions in relation to the quality of everything

4) Choice of work—the control over what work I do, the pieces of that I do, and with whom I work

5) Revenue—making a decent living and having choices in my life (and for my family)

These top 5 priorities in many ways, define the heart and soul of Microbusiness owners and the ways in which they operate, think, make choices and react.

Another key Grand Canyon-like factor is “entrepreneurs” and “self-employed” people and how that ties into their definition of success. The word “entrepreneur” is thrown around like seeds blowing in the wind. Of the 28,175,504 total US firms (data available at this writing), 27,002,131 or 95.8% of them are Microbusinesses.

All of these business owners are self-employed. And although all entrepreneurs are (almost always) also self-employed, their mission is incredibly different. I hear consensus that perhaps as much as .5%—one-half of one percent of the self-employed are an entrepreneur. The self-employed pretty much follow the top 5 model and have created their own job while entrepreneurs are driven, risk takers, builders and think large.

One person or couple has the dream of opening a restaurant. They do and are successful. They have great employees, fabulous customers, make good money and have fun. They have also thought about opening a second place. The other person or couple has opened a similar restaurant and now wants to open 87 more places, begin a line of frozen products, sell to the institutional market, sell internationally and perhaps evolve toward an IPO. The later are entrepreneurs in the high risk/high reward and large context while the former is satisfied with doing very well, having choices, some security, flexibility and having fun.

Entrepreneurs make decisions, operate, define success and think differently than the self-employed. No judgment. Just fact.

Another key element that differentiates Microbusinesses from other firms including other small businesses I refer to as “4/40/400”.

Let’s look at three US businesses, one with 4 people, one with 40 people and one with 400 people. ALL are US small businesses. Yet, the business of 40 is much closer, in most aspects of operations, to the business of 400 than it is to the business of 4.

True, the business of 40 is only 36 people larger than 4 while the 400-person firm is 360 people larger than the 40-person firm. No matter. They way the 40-person business operates is actually very close to that of the 400 person firm starting with specialization. A constant with Microbusinesses is that these are persons or small groups of generalists and things begin to change radically with firms that have specialization. The model is completely different with generalists than with specialists.

Now, let’s hop into our spaceships and travel to Venus. Most remember the Mars and Venus reference to the best selling book, Men Are from Mars, Women Are from Venus by John Gray. The main point that Gray made was that women and men are very different—they operate, feel, think, act and relate differently AND being aware of those differences and modifying behavior and attitude when dealing with them can be more successful.

I became aware of data in 2001 that confirmed our earlier assessment that women and men also approach business start-ups (and business operations) very differently—very Mars and Venus-like. The data told us that when the business start-up was created and managed with more accepted female characteristics—from Venus, it was more successful, sustainable and less stressful.

Generally speaking, women are more naturally collaborative, cooperative and better communicators in this context than most men…and the data showed this. Also apparent was that although it took most women longer to start-up than men, they built a more solid, reliable and workable model than most men.

The women wanted affirmation, several sets of feedback, advice from numerous sources, plenty of time to think it through…and feel it through while the men plowed forward and ‘got it done’. Women usually ask for directions on the road and men don’t.

It’s important to understand the style differences and not the gender information so much. Microbusinesses most often Network to do almost everything and they must cooperate, form alliances and coexist to survive…and to innovate.

Microbusinesses are from Venus means that they operate in this way and can be seen as more female in how they do it.