My there! My name is Steve Kwan. User experience design is my passion.

5 reasons to avoid microbusinesses

(April 12th, 2009 - 9:43AM)

There's nothing wrong with small businesses. My best clients are small businesses. But be very careful when planning to do work for microbusinesses.

A microbusiness is defined as a business with 5 or fewer employees. There's nothing necessarily bad about being so small - heck, my own company is a microbusiness - but from my experience, microbusinesses often share the following characteristics:

• They're excessively cheap.

  Frugality can be a virtue, particularly in our current recession. But microbusinesses tend to be excessively frugal. When microbusinesses make purchasing decisions, the sole factor they often consider is price. Not quality, not ROI, but price.

  So when you bid on a project for a microbusiness, you'll find they don't care about your qualifications or expertise; they just want to know if you're willing to work for $10/hr. Not only is this a bad trend for your career, but it cheapens our discipline as a whole when people are willing to work at subsistence wages.

• They're unprofessional.

  Most of the time, microbusinesses are small because they have no desire to grow. This is fine. However, some microbusinesses remain small because they lack the business skills to expand. These are the ones you have to look out for.

  I once worked with a microbusiness software house that had remained tiny for over 30 years - an eternity in the software world. And it was not their intention to remain this small - they simply didn't have the talent on staff to grow. There are reasons why companies like this are unable to grow past the micro stage, and I highly recommend avoiding them unless you want to experience their deficiencies first-hand.

• Their referrals aren't very good.

  Birds of a feather flock together. If you have a cheap, difficult microbusiness as a client, the best referrals you'll get are to other cheap, difficult microbusinesses. Break the cycle and look for better clients, rather than relying on lousy referrals.

• They demand more than they've paid for.

  A lot of microbusinesses will try to suck you in for unpaid work. This is unfortunate, because it prevents you from taking on other lucrative contracts.

• The likelihood of project failure is high.

  For the reasons listed above, it's extremely likely that projects done for microbusinesses will fail. And even if you do succeed in completing these projects, it will often be done so at a quality level that you find unacceptable. Unfortunately, this doesn't bode well for your portfolio and career development.

For these reasons, you should be very careful when engaging with microbusinesses. That being said, not all microbusinesses are bad - in fact, I've worked with a lot of microbusinesses that have been an absolute joy. However, microbusinesses are, on average, more difficult clients than small businesses, so be very careful when taking on a client in this situation.