Read Our Blogs

Difference between a Small Business and a Micro Business

Difference between a Small Business and a Micro BusinessAs a business owner you might have come across articles titled “How to effectively manage your small business listings?” and “Ways to add your small business to a local business directory”, but have you stopped a second to think about whether your business is a small business?

The term “small business” is being used freely and hence it can be misleading at times. Most people have a perception that small businesses have very few employees but in reality, some small businesses might even employ several hundred employees. If you are thinking of starting a business or are a new businessman sorting out the terminologies, here is a guide to help you figure out the differences between micro-businesses and small businesses. 

What Is a Micro Business?

Businesses which employ an extremely small number of people (mostly less than 9) are classified as micro businesses. Solopreneurs,side hustlers and business owners who employ less than nine employees including themselves are known to own a micro business. 

Micro businesses operate on a small scale but they are considered to be an important part of the economy. They require less capital and the business activities involved in micro businesses are much less than in small businesses. Usually, micro businesses are defined as the ones that:

  • Have fewer than 9-10 employees, including the business owner
  • Have lesser than $250,000 annual sales
  • Use less than $50,000 capital to start 

Usually, micro businesses are started as a side hustle -it can be housekeepers, professional service providers and freelancers in any field. Micro businesses can grow over time into small businesses or remain to be micro business. It depends on the owner’s passion for growth and intention. 

What Is a Small Business?

Small businesses are usually classified as businesses with less than 500 employees. But this definition can vary and people might define small businesses by the average annual receipts over time. All micro businesses are small businesses and the micro businesses are a subset of small businesses. 

Standards for Small Businesses

  • Should have less than 500 employees
  • Should have less than $7.5 million in annual receipts
  • Should be independently owned and operated by the business owner
  • Should not be dominant on a national basis

About 99.9% of businesses in the United States are considered to be small businesses. The most common sectors with small businesses include IT, bookkeeping, real estate, catering, childcare, restaurants and repair services.  

Also Read: 5 Ways to Increase the Visibility of Your Business

Small Businesses vs. Micro Businesses

Apart from the differences in the number of employees and annual receipts, the small and micro businesses differ in the way they are taxed. This depends on how these businesses are registered. 

Most small businesses are registered as LLC’s while some are registered as corporations. This type of registration provides personal liability protection for the business owner. While the LLC business owners can choose to be taxed as a pass-through entity or a corporation, those registered as a corporation have no choice other than to be taxed as a corporation. 

Businesses that function as sole proprietorships do not require registration with the state. If you are the sole owner of the company, then you are taxed according to your personal tax rate by the law. You can even deduct your business expenses on the personal tax return given that you maintain the business and personal expenses separate. Micro businesses mostly start as solo proprietorships but can be registered as separate entities over time. 

Now that we have made the main difference clear, there is a similarity that both micro and small businesses share –the need for visibility. Most micro businesses and some small businesses have a limited budget for marketing which in turn makes them less popular when compared to larger businesses. 

Lead generation hence becomes one of the key goals for both micro and small businesses. To make your website recognisable among the target audience and to generate more leads, creating small business profiles is a good choice. The local business directories provide a good platform to make this happen. 

At LocalBizNetwork, we have listings with never-seen-before elements. With the provision to include blogs, videos, social media links and more our listing can serve as a mini-website for your business. Check out the features of our listings at


We started in 1999 as a small company aiming to help small business owners thrive in the fast-paced business world. We have grown to become a global small business organization which helps owners gain credibility. Interested in us?  Click here to visit our website.

  • May 25, 2022

Comments - 2

Share Your Thoughts

Verify you're Human*

Just check on this box below to verify

Search our Blogs

Categories :

SEO/SEM (31)

10 Smart Ways to Build Backlinks to Your Website

12 Most Important Tips for an Effective SEO Strategy

Artificial Intelligence (AI) - Your Business on Google Search is Changing

BERT Algorithm Update: Goodbye, Keywords! Hello, Search Intent!

Busting Myths About Online Business Directories

Exploring the New Technologies in SEO (Keeping Abreast With the Ever-Changing World of SEO)

Get quality backlinks to your website 101

How are Data and Empathy key to great Marketing?

Keyword Research to Strategize Your SEO

Link building techniques for 2019

List of Emerging Business Profile Creation Sites You Cannot Afford to Miss

List of Top 10 SEO Companies in Chennai

Optimizing SEO – A Business Lifeline in Pandemic Times

Paid Business Listing vs. Free Business Listing (Pros and Cons)

Rewriting Tools and Services

Role of Bing in Digital Marketing

Search Engine Optimization Techniques That Will Increase Your Website Traffic - Part 1

Search Engine Optimization Techniques That Will Increase Your Website Traffic-Part 2

The Five Imperatives Of Great Website Ranking

What are SEO Optimization Technique?

What are the Best Websites to Use for Effective Business Listings?

What are the different types of Business Directories, and how to choose the right ones?

What are the Key Differences between Local SEO and Business Listing?

What are the Possible Features you can expect in a Business Profile Site?

What is SEO?

What is Technical SEO

What is the Concept of Google Page Rank Algorithm

Why customer reviews are critical

Why Isn’t My Business Showing Up in the Top Searches?

Why Mobile and Page Speed Matters in SEO

Why Updating Your Business Profile Is Essential to Rank Higher?

Small Business Advisory (27)

11 Tips from Removalists When Relocating to a New Office Space

15 Small Business Ideas That Do Not Cost Money

5 mistakes to avoid when naming your business

5 Ways by Which Start-Ups Can Earn Consumer Trust

5 Ways to Increase the Visibility of Your Business

6 Common Mistakes Security Agents Make, Choose the Right One

8 Efficient Ways to Take Charge of Your Small Business' Online Reputation

Business Interruption Insurance

Creating a vision board for your small business: Does it work?

Difference between a Small Business and a Micro Business

How Should Small Businesses Change to Survive the Pandemic

How to Promote a Small Business?

How To Start A Small Business In California – Easy Steps

How to Take Maximum Advantage of Local Business Directories for Promoting Your Business?

Is Becoming a Member of a Trade Association Necessary?

List of Emerging Business Profile Creation Sites You Cannot Afford to Miss

New Yorker Starts a Coaching Business in Silicon Valley

People Are Quitting Stable Jobs for a Side Hustle –The Good Things About Being a Solopreneur!

Pro Tips - Pick the Best Estate Agents for You

Small Biz Ideas with Low Investment

Small Business Marketing Trends for 2021

Strategies for Small Business Recovery after the Pandemic

Top 10 Reasons Why your Small Business MUST have a Digital Presence

What Is Upselling? In What Way Does It Benefit Your Small Business?

Who is a Social Entrepreneur

Why Market Research is Important for SMEs (Small and Medium Enterprises)

Why You Should Work for a Small Business

About the Author

LocalBizNetwork, LLC was formed in 1999 to help small business owners with Online Solutions. The company has grown into a global small business organization from its humble Silicon Valley roots. LocalBizNetwork, LLC has partnered with various small business organizations throughout the world to build a marketing platform that will help the business owner become more visible in the online world.

Do You Have Questions?

Feel free to contact us by email. We usually respond within 24-48 hours.