The Rise of Micro Companies

A cross posting from the Business Studies blog because this development is too important to miss! Here’s a term that ought to find itself into the next editions of the economics textbooks - micro-companies.  Of course, it won’t (maybe in 2020) but it should.  Because in the last five years there has been an increase of over 250,000 in their number in Britain.

This Telegraph article is well worth printing out and handing out to students.  Lots of great insights here into how the nature of business organisation is changing in the UK (and more than likely in other developed economies too).

A micro-company is defined as a one or two-person company.  Not a sole trader or partnership, but a limited company owned and operated by one or two people. Typically these micro-companies are formed to offer service-sector activities, but not exclusively so.  Some key points I picked up from the article include:

- Micro-companies have fared relatively well during the recession (often based at home or shared offices; low overheads; financed through personal funds)
- Much lower chance of business failure compared with larger, better established companies
- Can these companies extend beyond their 1-2 person structure to become bigger businesses? Do the owners typically want this to happen?

The rise of the micro-company is closely linked to the phenomenon of the 5-9ers - a trend wonderfully described by Emma Jones over at Enterprise Nation.  These are small businesses started by entrepreneurs at the same time as holding down the day-job. 

That’s how we started tutor2u back in 2002 and its amazing how many people we meet (or contact us) doing exactly the same.

The textbooks will take years to reflect this change but I am busy amending our own study companions to include them when they are next updated!

Unit 2 Macro: Cyclical and Structural Economic Issues Facing the UK [23 May 2012]
Unit 2 Macro: Evaluation on Supply-Side Policies [21 May 2012]
Unit 2 Macro: Migration and the UK Economy [20 May 2012]
Unit 2 Macro: Positive and Negative Multiplier Effects [20 May 2012]
Unit 2 Macro: The Importance of Productivity [20 May 2012]
Q&A: What do we need to know about output gaps? [20 May 2012]
Unit 2 Macro: The Output Gap [20 May 2012]
Revision notes on unemployment [20 May 2012]
Unit 1 Micro: Revision Presentation on Government Intervention [16 May 2012]
Unit 1 Micro: Revision Presentation on the Price Mechanism [16 May 2012]
Improving Evaluation Skills in Economics Exams [16 May 2012]
Grexit - Andrew Balls on Greece and the Euro [16 May 2012]
Final Speaker Line Up for the Economics Teacher Conference 2012 [15 May 2012]
Unit 4 Macro: African Human Development Report 2012 [15 May 2012]
Unit 2 Macro: Revision Notes on Supply-side Policies [10 May 2012]
Unit 1 Micro: Revision Blogs on Markets and Intervention [10 May 2012]
Unit 2 Macro: 10 Key Revision Topics for EdExcel [7 May 2012]
Unit 2 Macro: Unemployment Glossary [5 May 2012]
Unit 2 Macro: Economic Cycle Glossary [5 May 2012]
Exam Technique for Economics - Weesteps to Evaluation [5 May 2012]
Macro Revision - Key Statistics on the UK Economy [4 May 2012]
Robert Schiller - Finance and the Good Society [1 May 2012]
Unit 1 Micro: Using the Cost-Benefit Principle [30 Apr 2012]
Macro Revision: Putting Things in Context [29 Apr 2012]
Unit 2 Macro: Britain back in Recession [29 Apr 2012]
Unit 4 Macro: The Euro Zone Crisis (Revision) [22 Apr 2012]
Unit 3 Micro: Key Diagrams for Business Economics [17 Apr 2012]
Unit 4 Macro: Managing the Global Commons - Limits to GDP [15 Apr 2012]
Unit 4 Macro: Mini Documentary on Financial Instability [15 Apr 2012]
Ukraine Hotel ‘Bandits’? [12 Apr 2012]
Government Intervention in the Energy Market [11 Apr 2012]
Football Clubs to Pay for Negative Externalities [11 Apr 2012]
2012 Economics Revision: Ways to Improve your Paper [9 Apr 2012]
Twitter - Help with Economics Revision [8 Apr 2012]
Unit 2 Macro: Inflation and the Business Environment [6 Apr 2012]
Unit 2 Macro: How the Economic Cycle affects Businesses [6 Apr 2012]
Unit 4 Macro: Pain in Spain as Fiscal Austerity Bites [1 Apr 2012]
Unit 2 Macro: Revision on Capital Investment [30 Mar 2012]
Intergenerational Equity - Fairness and the Slump [28 Mar 2012]
Life in the Slow Lane - UK Growth in 2011 Lags the Euro Area [28 Mar 2012]
George Buckley at the Millfield Economics Society [28 Mar 2012]
Unit 4 Macro: Evaluating 3 Years of Quantitative Easing [27 Mar 2012]
Unit 1 Micro: The Tax on Beer [16 Mar 2012]
Unit 1 Micro: Inequality - The Rise of Fuel Poverty [15 Mar 2012]
Unit 2 Macro: Policies to Drive Economic Recovery [9 Mar 2012]
Adapt or Die - Lord Bilimoria and the Cobra Story [4 Mar 2012]
Unit 2 Macro: Might Oil Prices Bring another Recession? [4 Mar 2012]
Unit 1 Micro: Highest and Lowest Paid Jobs in the UK [26 Feb 2012]
Unit 4 Macro: King on the UK Economy [15 Feb 2012]
Competitiveness [8 Feb 2012]
Unit 1 Micro: Can the UK Computer Games Industry Grow [24 Jan 2012]
Unit 4 Macro: Money, Debt and the New World Order [22 Jan 2012]
Teaching vacancy - Economics & Business Studies, Reed’s School - Cobham, Surrey [19 Jan 2012]
AS and A2 Economics Revision Workshops in Spring 2012 (update) [16 Jan 2012]
Unit 4 Macro: Economics of Fiscal Deficit Reduction [12 Jan 2012]
Revision Presentation: Economics Evaluation Skills [10 Jan 2012]
Exam Advice: 10 Ideas for a Better Economics Paper [10 Jan 2012]
Unit 2 Macro: Factors Driving Business Investment [10 Jan 2012]
Unit 4 Macro: Natural Disasters and their Economic Impact [7 Jan 2012]
AS and A2 Economics - 10 Ways to Improve Evaluation [4 Jan 2012]
Unit 1 Micro: Prezi on the Economics of Negative Externalities [2 Jan 2012]
Resources on Keynes and Hayek [27 Dec 2011]
2011 in Review - The US Economy [27 Dec 2011]
Unit 2 Macro: The UK Housing Market in 2011 [26 Dec 2011]
Unit 2 Macro: Mobile Phones and African Economic Growth [18 Dec 2011]
Unit 4 Macro: The Rise in Self Employment [17 Dec 2011]
Introduction to Neuroeconomics - Fusing Psychology with Economics [16 Dec 2011]
Rory Sutherland at Zeitgeist [1 Dec 2011]
Unit 4 Macro: Does UK Manufacturing have a Future? [30 Nov 2011]
Behavioural Economics: Herd Behaviour [28 Nov 2011]
Where is the UK Economy? National Output [22 Nov 2011]
Stephen King - Great Article on Macroeconomics [22 Nov 2011]
Beyond the Bike - The Value of Money [19 Nov 2011]
LSE Lecture: Daniel Kahneman - Thinking Fast and Slow [15 Nov 2011]
LSE lecture: Darwin economy [13 Nov 2011]
AS Macro: The State of British Business [13 Nov 2011]
Economics Resources - Week Ended 6 November 2011 [6 Nov 2011]
Unit 2 Macro: Video Clips on Unemployment [6 Nov 2011]
Unit 3 Micro: Impulses to Change Management Models [5 Nov 2011]
Unit 4 Macro: Richard Florida on the Great Reset [5 Nov 2011]
Is happiness the right measure of social progress? [20 Oct 2011]
Keynes Prize: The Economics of Cities (3) [14 Oct 2011]
Can the “invisible hand” solve Africa’s poverty? [13 Oct 2011]
UK Unemployment in October 2011 [12 Oct 2011]
Unit 4 Macro: Unit Labour Costs and Inflation [12 Oct 2011]
Unit 2 Macro: UK suffers a weak recovery [12 Oct 2011]
Why Is Macroeconomics Such A Mess? [11 Oct 2011]
Unit 3 Micro: Contestable Markets - Lucozade takes on Coca Cola [10 Oct 2011]
Fat tax: Denmark [5 Oct 2011]
Unit 3 Micro: Science Cities and External Economies of Scale [29 Sep 2011]
Unit 4 Macro: Greek Economy at Default’s Door [25 Sep 2011]
Unit 4 Macro: IMF Flags up Risks of Double Dip [20 Sep 2011]
Study Note - Finite Resources and Sustainability [13 Sep 2011]
Unit 2 Macro: Income and Wealth in the UK [12 Sep 2011]
UK Macro: Risks of a Double Dip Recession [12 Sep 2011]
Starter Video: The Slums of Manilla [11 Sep 2011]
50% tax rates - Chuck it George [7 Sep 2011]
NHS spending good, private provision bad? [5 Sep 2011]
Mixing with the Nobel Economists [4 Sep 2011]
Toilet rolls, soap and climate change [1 Sep 2011]

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