Why is Micro-Entrepreneurship on the Rise?

Recently, there has been a significant shift in the business landscape with the rise of micro entrepreneurship. These individuals, known as micro entrepreneurs, are taking the leap to start their own small businesses, and the trend is only growing stronger. What exactly is driving this surge in micro entrepreneurship?

What is a micro-entrepreneur?

A micro-entrepreneur is an individual who starts a small-scale business venture. Often, they start their business by doing online business as side hustles while doing their 9-to-5 job. When they find stability, the business will be run full-time. They usually work from home or in rented workspaces. These ventures typically require minimal investment and can be managed by one person or more, but not more than ten.

A lot of these entrepreneurs chose to stay small and not scale their business further. The reason is not because of lack of skills or limitations, based on theories; however, it is because they stay on purpose. It could be due to the ability to have full control or the desire to have less stress in managing their business.

Why are people choosing to start micro businesses?

Low Barriers to Entry

For those who are looking to enter the market quickly and easily, starting a micro business is a way to go. Micro entrepreneurs can leverage online platforms and digital tools to help reach customers both locally and globally.

More flexibility and niche focus

Since micro businesses are so small, they can move quickly and easily adapt to changes in the market, unlike larger businesses. They can also specialize in serving a particular group of customers or offering something that’s different from what larger companies provide. Unlike larger companies, they could offer more specialized options, such as producing biscuits that are nut-free and gluten-free for people with allergies. Without needing a lot of money or resources, they could meet the needs of their specific niches and stand out more in the market.

Lower costs

One big reason why more people are starting micro businesses is because it costs less money. Without needing many employees, microentrepreneurs can not worry about overhead costs and renting fancy office spaces since they can do it remotely, especially if it is done as a side hustle. The survey by The RBC Small Business Poll supports this, revealing that 47% of Canadian small business owners and aspiring entrepreneurs associate with this.

Era of digitalization

With the widespread adoption of digital tools and online platforms, starting a micro business has never been more accessible. The internet provides aspiring entrepreneurs with opportunities to increase their business visibility both locally and globally. In addition, digitalization provides benefits that could streamline various aspects of business operations, from managing finances to communicating with customers. As highlighted in the study on digital financial inclusion among micro-enterprises, access to digital finance is becoming increasingly important for small businesses to navigate challenges like regulations and competition. This is what makes it easier for micro businesses to operate efficiently during this era of digitalization, even on a smaller scale.

Higher cost of living

It is no longer a surprise that people are choosing to start a micro business or side hustle as a way to earn extra income to support the rising cost of living. Also from the survey, a staggering 74% of Canadian small business owners and entrepreneurs showed motivation to start a business due to inflation. This is especially true for Gen Z, which shows 84% of respondents.

What sets them apart from small businesses and solo enterprises?

What sets micro entrepreneurs apart from small businesses and solo enterprises is their size and focus. Micro businesses are much smaller in size compared to small businesses. Some operate in small teams or even alone by themselves, quite similar to solopreneurs. In Malaysia, this business usually has less than 5 employees and a sales turnover of less than RM300,00. Unlike solopreneurs, micro entrepreneurs can be more agile and innovative due to the nature of working in smaller teams, allowing them to exchange insights and fresh perspectives.


The rise of micro-entrepreneurship can be attributed to several key factors that make this type of business attractive. It has some freedom, which allows entrepreneurs to have flexibility and full control over their businesses. Even though they may choose to stay small, it would not hinder them from being innovative and distinguishing themselves from other competitors. This will enable them to thrive and adapt quickly to the business landscape.

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