Micro-businesses - The New Big (I)

As consumers are empowered with choices, markets are becoming more segmented leading to the creation of many micro-markets. With this also brings opportunities for mirco-businesses to cater to these niches. With norms ever evolving, consumers themselves may not be aware of the needs, and it is this uncontested space that micro-businesses can move quickly into. Micro-businesses are attractive because:

1. Small gives you the flexibility to change the business model when your competition changes theirs.

Small means that you do not have substantial invested capital at risk. So when you misread the market, you do not have the heartache of an expensive legacy to burden you with. You merely move on. That is flexibility. It allows you to compete with your core competence intacted i.e. intellectual capital. Additionally, being asset light, you are better poised to maintain a high Market Value Added (MVA) Ratio, and this means that you are in a position to create shareholder value.

2. Small means you can tell the truth on your blog.

This is an interesting point. I used to work in a large organisation. They had the capital to commit, and they expanded rapidly and started recruiting, on the basis of experience and qualification. They were certainly able to hire the better ones in the market. Once hired, my first day in the office was to familiarise myself with the processes of the organisation. What a process! There was none. And I had to mull over whether I should make any attempt to right this - it wasn't in my job scope. It took a long while before the processes were documented. Lack of documentation lead to inconsistencies and gaps in service level, and the customers usually bore the brunt of such blunders. Service staff is left to their own devices to make up excuses to appease the cutomers, and usually it is just to get the customers off their back. The business model is all tripped up and paralysis sets in. Sounds familiar - imagine the disaster looming ahead!

Being small and without legacy give you enough wiggle room to maneuver - ensuring that each promise is fulfilled to the satisfaction of your customer. With a well thought through vision and value proposition, you can articulate and communicate the message clearly and with honesty - this provides the platform for you to scale your business model and avoid the pitfalls experienced by larger outfits.

3. Small means that you can answer email from your customers.

Customers enjoy the personal touch and they appreciate it if you take the time to attend to their needs. Which is why remarkable services get talked about!

Keywords: micro businesses, micro markets, MVA Ratio, shareholder value