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Running a Micro Business

Most people who go into business for themselves will be starting a micro business. But, what does it take to operate a micro business successfully

If you have been reading our newsletter for a while, you will know how we classify businesses:

  • Micro- The principal does the primary work of the business

  • Small - The principal hires and manages workers who do the primary work of the business

  • Midsize - The principal manages the enterprise. At least one layer of managers is inserted between the principal and the workers.

Broken down to the least common denominator, successfully running a business, micro or otherwise, is only about two things: figuring out what to do and then getting it done. It's just that simple...and that complex. Both figuring out what to do and getting it done, admittedly, can be fraught with challenge. But, at its core, this is what you need to do to operate a successful business.

In a micro business, the principal is personally engaged in doing the primary work of the business. "Getting it done," is a critical part of the principal's job description. Often there just isn't anyone else. Delegation isn't an option. It's important to remember that the primary work of the business will expand to include all activities that are necessary to run the company. In fact, we advise would-be entrepreneurs not to start a new venture simply because they want to do the primary work of the business. If you love to bake, don't open a bakery. There is a lot more to running a bakery than baking. You'll quickly discover that you are keeping the books, paying the bills, ordering supplies, and scrubbing the floor. Open a bakery because you want to run a business. If you want to bake, get a job as a baker.

In a micro business, the principal's skill set and his or her motivation make the difference between success and failure. Does the principal have the ability to do the work, and the will to do it? If the principal has a weakness in either area, he or she may be able to overcome it. However, if an entrepreneur is significantly lacking in either the skill set needed to succeed in a particular endeavor or the motivation to get the work done, it is probably best to consider alternative employment. There is wisdom to the old adage that you can't make a silk purse out of a sow's ear. You shouldn't try.

Beyond executing the primary work of the enterprise, the principal of a micro business has the responsibility to figure out what to do. Determining what to do can be broken down into two additional responsibilities: making tactical decisions and developing strategy. For our purposes, strategy involves those decisions that set the long-term direction of the enterprise. Tactical decisions, on the other hand, are those day-to-day choices. They may not require massive amounts of prior planning, but the principle must make them in the course of executing the strategy.

To successfully run a micro business, there are three things the principal will have to do: (1) do the primary work of the business, (2) make tactical decisions, and (3) develop a strategy. As the chart below indicates, the principal should only be engaged in doing the primary work of the company while it is a micro business. Once the business transitions to a small structure, the owner will delegate much of the work to others. The principal will continue to make tactical decisions of importance through the small stage, but will need to delegate those decisions to others when the enterprise becomes midsize. Conversely, the principal will maintain primary responsibility for setting the strategy through the business achieving midsize status.

Principal's Responsibilities


Doing the Work of the Business

Make Tactical Decisions

Develop Strategy

While a micro business is the most simple of structures, when it is your business, nothing is ever simple. Figuring out what to do and getting it done can be challenging, exhilarating, exciting, and at times, overwhelming. We tackle these challenges in our book, Let Go to Grow, which will publish in April. During the next several months, we will share some of our research and findings with you. Please feel free to share your comments and questions. We look forward to the feedback.

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