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What is microbusiness

Starting your own microbusiness is much easier than it sounds. Whether you are making jewelry by hand, printing something for sale or sewing, half the battle is already done. It is difficult to calculate how many such industries exist at all, given that most of them are, in fact, illegal.

How does microbusiness work? In the same way as any other: you register a business, be sure to do tax reporting according to the chosen system and do business on your own or with the help of employees.

Unfortunately, representatives of the microbusiness market in Russia are in no hurry to register so as not to pay taxes and not waste time and effort filling out documents, however, they may later have to pay much more. But what is the general difference between microbusiness and small business and what are its features?

Small and micro business concept

A small business is a small business or firm. It usually belongs to an individual, in more rare cases, to several individuals. Our legislation determines the scale of business depending on two criteria: revenue (microbusiness turnover) and the number of employees hired.

For instance:

a medium-sized enterprise has an income of 2,000,000,000 rubles and from 101 to 250 employees;
a small business has an income of 800,000,000 rubles and up to 100 employees;
a micro-enterprise has an income of up to 120,000,000 rubles and up to 15 people in the state.
As you can see, a microenterprise is not so micro – not every small business will pull such turnovers. Another criterion is the share of participation in the capital of third parties.

So, for example, state education and public organizations (including religious) cannot have a share of more than 25%, and legal entities – more than 49%, i.e. controlling stake. But small and medium-sized businesses can have a share of any size.

Microbusiness has its advantages:

low start-up costs – even with a small capital, you can open an enterprise, it will pay off faster without any loans and borrowings. Also, the plus is that the owner of such a company can make financial decisions without unnecessary bureaucracy;
complete control – a micro-enterprise is entirely controlled by its owner and creator, which is very convenient and simplifies many processes;
easy to manage – less business means fewer customers, fewer supplies, less costs and less commitment;
mobility – the smaller the business, the more flexible it adjusts to the current market changes. In addition, it is easier for him to move if he suddenly needs it, and he is also more client-oriented, because the target audience is clear and visible;
Convenience of marketing – today there are many options for budget promotion, from social networks to flyers, and it is much easier for small businesses to promote this way, including locally.
low turnover of microbusiness – this can hinder your development if you want to enter the market with an innovative product or are simply interested in rapid growth;
competition – large firms are more promoted, they are simply more “noisy and noticeable”, so you have to be prepared to compete with them and their capabilities;
crisis risk – in any crisis from the outside, in a large market, small enterprises are the first to suffer. It is even more difficult for micro businesses to get a loan, so you have to always be on your guard. However, there is also a plus – microbusiness losses are also always lower than those of industrial giants.
Beginner options
Microbusiness ideas are feasible even in a small town. If you want to try yourself in business, but are not ready for large investments in rent and so on, you can always start a home business – this is a common example of microbusiness.

The most common microbusiness idea is online consultation. Legal, accounting, psychological or teaching, for example, a foreign language. Advertising in social networks is perfect, and another plus of such a business is the absence of territorial boundaries, because you can receive clients from everywhere.

Another option for microbusiness is making something at home, literally microbusiness at home or, for example, in a garage, that is, without renting additional premises. Baking cakes, making homemade meals, mastering toys, embroidery, painting or making epoxy jewelry are all options for microbusiness.

The main thing is to remember that microbusiness is still a business that requires appropriate permits. So, for example, when working with food, health books are required, and when hiring employees, compliance with all the formalities of the Labor Code, the availability of an equipped place for work, fire safety standards, not to mention financial accounting, which is no less important. Therefore, be sure to consult with a lawyer before registering something, and calculate all the costs and risks.

Both the state and banks offer special programs for microbusiness. On the part of the state, these are various benefits that make life easier for its leaders – from simplified accounting to subsidies and grants.

Banks, on the other hand, do their bit with the help of special concessional lending programs.

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