Industry FAQ

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WHAT IS A MICROBUSINESS?

These small and microbusinesses – those with less than $50,000 in start-up capital and that employ five or fewer people – are the greatest job generators in boom times and recessions. Many start as part-time or home-based businesses.

WHAT IS MICROBUSINESS DEVELOPMENT?

Microbusiness development enables individuals to achieve economic self-sufficiency by starting and growing their own businesses. The most evident example is microfinancing, which include small loans – usually less than $50,000 – that are made to entrepreneurs to help with business start-up or expansion.

These loans are some of the safest and successful investments because they are backed by other microbusiness development services, such as ongoing business training and technical assistance, incubators that provide physical office space and equipment, mentoring and coaching, and access to markets and technology.

Microbusiness development reduces the risk associated with running a business and increases the chances of long-term success.

WHO PROVIDES MICROBUSINESS SERVICES?

Microbusiness services are usually provided by community-based nonprofit agencies and are funded through partnerships with government agencies, foundations, private financial institutions and individuals.

HOW DOES MICROBUSINESS DEVELOPMENT BENEFIT THE COMMUNITY?

  • Increases the number of jobs created by new and expanding very small businesses
  • Improves the local business environment, increasing commercial occupancy and development, and sales tax collections
  • Increases the diversity and availability of goods and services in the community
  • Reduces default and delinquency rates of small business loans
  • Reduces public assistance costs, such as welfare and unemployment

HOW DOES MICROBUSINESS DEVELOPMENT BENEFIT INDIVIDUALS?

  • Improves business sustainability and profitability
  • Improves economic self-sufficiency for families in poverty
  • Increases business skills and self-esteem
  • Improves access to community resources and credit opportunities

CAMEO LEADS MICROBUSINESS DEVELOPMENT IN CALIFORNIA

  • By providing training and technical assistance for microbusiness service providers
  • By providing information on microbusiness program funding, research, resources, and partnerships
  • By hosting public education events that showcase the field of microbusiness development and make the case for community support
  • By facilitating community efforts that support microbusiness development
  • Through advocacy efforts on a federal, state, and local level

MICROBUSINESS DEVELOPMENT AT THE NATIONAL LEVEL

If one in three microbusinesses in the United States hired an additional employee, the U.S. would be at full employment. Download AEO’s May 2011 report, The Power of One in Three.