Module 1: Introduction to Micro Business

Lesson 1: What is a Micro Business?

Many people want to earn money by starting something of their own. But they feel scared because they think they need a lot of money or a big place. That is not true. A micro business is a small and easy way to begin. It needs less money and fewer people. You can even start from home. In this lesson, we will learn what a micro business means, how it is different from bigger businesses, and how anyone can start one—even with low investment.

Key Concepts

• Understanding Business and Micro Business
• General Difference Between Micro, Small, and Large Businesses
• Basic Business Terms
• Who Usually Starts Micro Businesses
• Common Examples of Offline and Online businesses

1. Understanding Business and Micro Business

» Understanding Business

A business is when you give something useful to people and take money in return. You may sell a product (like a bottle of pickle) or offer a service (like washing clothes). People run businesses to earn money and help others. Many small businesses offer either products or services. Some offer both.
Example: A tailor gives a service by stitching clothes and sells ready-made dresses as products.

» Understanding Micro Business

A micro business is a very small business. It can be started by one person or a small family. It needs very little money. Many times, people run it from home or a rented room. These types of businesses are easy to manage.

• Examples of Micro Business
– A woman making natural soaps at home and selling them
– A man running a small juice cart
– A retired person giving home tuition
– A tailor stitching clothes in a home shop
– A young girl starting a paper flower-making business

• Main Features of a Micro Business
– Often run by the owner and family
– Works with local customers
– Uses simple tools and machines
– Can run from home or online
– Flexible time
– Easy to start and grow slowly

• Examples
– Rekha bakes cakes at home and sells them.
– Ramesh runs a small welding shop near his house.
– Sulekha stitches blouses from home.
– Suresh makes soaps and sells them on Instagram.

These are all micro businesses. People start them with low cost and grow them over time.

2. General Difference Between Micro, Small, and Large Businesses

Businesses are grouped by how much money they need and how many people work in them.

As you can see, a micro business needs the least money and workers. Anyone can start it with a small amount and one skill.

3. Basic Business Terms

» Customer
A person who buys your product or uses your service.
Example: A man who buys a bag from you is your customer.

» Sale
When someone pays you money and takes your product or service.
Example: Selling one soap for ₹30 is one sale.

» Cost
The money you spend to make or give something.
Example: If you spend ₹15 to make one soap, that is your cost.

» Price
The amount you ask your customer to pay.
Example: You sell that soap for ₹30, so ₹30 is the price.

» Income
The total money you get after selling your product or service.
Example: If you sell two soaps at ₹30 each, your income is ₹60.

» Profit
The extra money you earn after cutting the cost.
Example: You sell one soap for ₹30. Cost is ₹15. Your profit is ₹15.

» Loss
When your cost is more than your price.
Example: If soap cost is ₹20 but you sell for ₹15, you lose ₹5.

» Demand
When many people want to buy your product or use your service.
Example: Ice cream has high demand in summer.

» Supply
The number of items or services you can give.
Example: If you make 25 pickles in a day, your supply is 25.

» Marketing
Ways to tell people about your business.
Example: Sharing your food items on WhatsApp or putting posters outside your home.

4. Who Usually Starts Micro Businesses

Many people with small savings or simple skills start micro businesses. These include:
• Women who want to work from home
• Youth who want to be self-employed
• Retired people with some money
• Skilled workers like tailors or electricians
• Unemployed people
• Families who want extra income

Example: Sulekha is a housewife. She learned stitching from her mother. She started stitching blouses at home. She now earns ₹10,000 every month.

5. Common Examples of Offline and Online businesses

You can run a business in two ways:
Offline – by meeting people face-to-face
Online – by using mobile apps or the internet

Let us see some examples.

» Offline Businesses

» Online Businesses

You can start your own micro business using WhatsApp, Facebook, Instagram, or a small website.

» Application

These simple words and ideas help you plan and run your small business. When you know the cost and profit, you can fix a good price. If you understand what people need, you can sell the right product or service. You can use marketing tricks like WhatsApp or telling people directly. Even with little money, you can run a strong micro business.

Now that you know what a micro business is, try to think about what you can start.

Steps to Start:
1. Think about one skill you have (cooking, sewing, painting, etc.)
2. See if people around you need it
3. Use things you already have at home
4. Start selling to neighbours or online
5. Keep costs low and earn more
6. Grow slowly using the money you earn

Even ₹2,000 is enough to begin something small.

» Short Assignment

Write 3 micro business ideas that you can start with less than ₹5,000. For each idea, also write: What is the product or service you will be offering? What will be your cost and price? How will you tell people about your business?

» Example

A woman starts a home tiffin service.
• She prepares lunch boxes for ₹40 each.
• Cost of making one tiffin is ₹20.
• She earns ₹20 profit on each.
• She gives free delivery to offices nearby.
• She shares a menu on WhatsApp every morning.

» Common Mistakes

1. Starting big without enough money. Solution: Always start small and grow step by step
2. Not writing down the cost properly. Solution: Always count all the small costs too.
3. Setting a very low price. Solution: Keep some profit, not just the cost.
4. Not checking if people want your product. Solution: Ask neighbours or friends before starting
5. Choosing a business you don’t understand. Solution: Start with something you know well
6. Not thinking about the customer. Solution: Ask what people need before you start.

» Summary

• Business means giving value in exchange for money
• Product is a thing; service is an action
• A micro business is a very small business
• Needs low money and fewer workers
• Easy to start from home or online
• Anyone can start—youth, women, retired people, skilled workers
• Always start small and grow slowly
• Basic words like cost, price, and profit are very useful
• Start simple, even from home

» FAQs

What is a micro business?
A micro business is a very small business started with low money and 1–10 people.

Can I start it from home?
Yes. Many micro businesses start from home.

How much money do I need?
Even ₹2,000 to ₹5,000 is enough to begin.

What if I have no money to start?
Use your skills. Start small. Borrow only if needed.

Who can start it?
Anyone—students, women, skilled people, retired people—can start a micro business.

What if I make no profit at first?
Keep learning and improving. It takes time to grow.