What is the definition of a micro business in the UK?

And why we need to know.

You will notice that we at Simply, are pretty wedded to using the term ‘micro business’ when talking about the small business owners we show up for everyday. But what exactly do we mean and why do we not just say small?

The definition of a micro business can be split into two distinct areas, size and turnover.

1. Micros have less than 10 employees. This means 0-9. Academic research will usually not include sole traders or single director businesses in the figures but for general conversation here, we do.

2. Micros need to have a turnover of less than £1 million. As you might imagine that scoops up a big portion of micros.

The figures (including single person businesses and those that don’t employ at all) in the UK show us that there are around 5.2 million micros in Britain accounting for around 96% of all private (not publicly owned) business. Micros contribute about 24% of all UK turnover too.

In essence, some big numbers for such small enterprises.

But why don’t we see talk about micros much on socials and search engines?

This is beginning to change, but in Britain we have generalised our language around business to lump all types into one or two areas. Clearly ‘small business’ is a term we see, embrace and admire in the UK but does, in fact, have its own definition. Small businesses in the UK have 10-49 employees by definition, so is often not the right description for many a little business.

The other term that is commonly used is ‘SME’ or small or medium sized enterprise. This term addresses businesses that are small (see above) or medium, defined at 50-249 employees. Pretty big in fact.

So far so dull you might say, but why do we need to know or care?

Our muddle in language leads to, at best, a misrepresentation of what kind of businesses make up the UK landscape but at worst, leads to (& has led to) a serious underestimating and underfunding of a huge swathe of UK business types. Business support programmes, public sector bodies & the media end up having conversations, not quite for, or to, the right people. Think amazing business programme for SMEs that only evidences what looks like a bigger business on the website & simply doesn’t represent that a micro might benefit. This may be because it’s assumed that micro businesses won’t be the source of the growth needed to improve UK productivity challenges, it may be an ignorance of the impact of the difference or perhaps it’s simply that we’re too enthralled by the narrative of big is better.

Let’s pause a moment. This article is not saying that big is bad, nor is it saying that all business support ignores micros, however…there is a case to mind our language, ensure inclusivity for the smallest of businesses & mine our micros to find the untapped innovation, potential & progress that the UK needs.

Where does all this information leave us? What have we understood? What next?

Here are some ideas to get us all thinking about how we define business, how our use of language could transform our British success story & what we might be missing by not focussing a spotlight on all the micros around us.

• micros come in all forms and are the backbone of our lives & communities. Not just cute makers at a market (although the value for place is underestimated) but freelance writers, professionals, plumbers, coaches, inventors, retailers & more. Imagine life without them.

• micros bootstrap (try gaining early investment for a micro folks) which can nurture valuable skills in agility & resilience that can be built on and grown.

• micros provide an earning potential for everyone, regardless of location, age, life stage etc as well as addressing some of the challenges of the workplace for those with family commitments, disability or other limitations.

• see bootstrapping above and you can also see that micros are inherently better at sustainability. Whether through doctrine or efficiency, micros simply don’t waste, consume or exploit at the same rate as larger companies (sweep of generalisation included) and at the very least, can help us create a new generation of businesses that are just built differently from day 1.

• in a world that has worshipped at the alter of huge business for a long time, micros offer a new narrative about what innovation, productivity, inclusivity, sustainability & agility can look like & what it can offer our economy as a whole.

By understanding the definition of a micro, using the correct language to describe what we see and experience and the real untapped potential in Britain, we have an opportunity to unleash a new chapter for people, places & planet.