Have you got the chops to start a microbusiness?  If you’re a creative thinker, you may find yourself diving into micropreneurship at some point. Definitions vary, but microenterprises typically have fewer than 20 employees.  According to Forbes, the vast majority of businesses (99.9%) in the USA are small businesses.[1]  With that, nearly half of all employees in America are employed by a small business.[2] Over half of the 33.3 million small businesses in the United States of America are microbusinesses.[3]

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When I started my sustainable fashion company Impact Luxury LLC, I aimed to address the harms of the fashion industry by providing ecologically safe, fairly made, adaptable designs for a diverse range of sizes.  In the process, I discovered the many ways an entrepreneur can get in over their head while trying to make a microenterprise work.  Below you will find some of the most common challenges that micropreneurs face and how to navigate them.

 

Business Structure
 

Determining your business structure is one of the first major decisions microbusiness and small business owners run into.[4]  The business structure will affect how the entity is taxed, governed, organized, and financed.  Consult with an accountant for tax implications specific to your entity type and jurisdiction.  When making this decision, it can also be helpful to discuss your short and long-term goals with a business attorney so they can assist you in determining the structure that may be most beneficial regarding those goals.  And don’t stress too much if the business structure you chose doesn’t end up being the best fit for your business down the road; it is generally pretty easy to change your business structure with legal support.

 

Licenses

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Some businesses require one or more licenses before providing products and services.  For example, restaurants in DC need to obtain approvals from the Department of Consumer and Regulatory Affairs, the Department of Health, and, often, the Alcoholic Beverage Regulation Administration before opening.[5]  As a fashion designer, I luckily do not need a license to sell clothing, jewelry, and accessories, but I still have to make sure I use quality materials to create my products.

 

Intellectual Property

 

Before committing to a business name, make sure it or a similar name is not already being used by a business in the same or a related industry. Search for the name online (a general Google search) and make sure the name doesn’t already appear on the following websites:

• Your state’s business entity database,

• The Internet Corporation for Assigned Names and Numbers (https://lookup.icann.org), and

• The United States Patent and Trademark Office (https://tmsearch.uspto.gov/search/search-information).

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Failing to follow this step can lead to unintentional infringement and costly rebranding.  Although I couldn’t afford to register my brand name and logo at first, I circulated them online via email signatures, websites, and social media. This helped establish limited, unregistered trademark protection.  If you’re the first to use a name or symbol commercially, you may obtain unregistered trademark rights for the territory where the brand operates.[6]  To strengthen your potential claim to a trademark, you can use the “TM” symbol for goods or the “SM” symbol for services that you develop.  Copyrighted works can include authored literary, auditory,  software, broadcast, or dramatic works.[7]  These copyrights exist as soon as the works are created and generally exist for decades before entering the public domain.  With less than $50, I bought a domain name to enhance my brand’s presence.

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Raising Capital

 

If you’re like me, you eat, sleep, and breathe your microbusiness. But, bootstrapping alone isn’t going to cut it.  Microenterprises typically receive less than 3% of venture capital funding.[8]  So, where do they turn?  Options include crowdfunding, microlending, and micro-angel investing.

 

Crowdfunding

 

Crowdfunding is a relatively new concept.  The first recorded instance of raising funds online was in 1997 when a British rock band called Marillon funded their reunion tour.[9]  As a result, a crowdfunding site called ArtistShare emerged in the year in 2000, and similar sites have been steadily growing this funding method every year since then.[10]  The modern-day crowdfunding boom as we know it came to fruition as a result of the 2008 financial crisis.[11]  Crowdfunding  involves raising small amounts of money from a large group of people and utilizing the internet, social media, and crowdfunding campaign websites to fund a new or emerging business, nonprofit, or project.[12]  Among the most popular crowdfunding websites are Indiegogo, GoFundMe, and Kickstarter.

 

Microlenders

 

Microlenders provide funding to those generally unable to access funds through traditional banking systems.[13]  Microlenders offer small business loans, typically those under $50,000.[14]  These loans are oriented towards startups and people with little to no credit history. Microloans and lines of credit from nonprofit lenders can also help micropreneurs with the funding piece of the puzzle because such investments are often non-extractive, meaning that the lender’s returns never exceed the borrower’s returns.[15]

 

Micro-Angel Investors

 

Don’t know any millionaires?  That’s okay!  A micro-angel investor is someone who can write a three- or four-figure check to back a startup’s idea.  After much searching for grants to apply to, I once came across an opportunity to apply for funding from an investor named Kathryn Finney of The Doonie Fund, which provides microgrants to dozens of black, female entrepreneurs. I received $100 from The Doonie Fund, $200 from my parents, and $100 from each of my sisters. With these contributions, I formed my LLC.

 

Other Challenges

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Many challenges faced by microbusinesses boil down to time, money, and marketing.  As. A fashion entrepreneur, hiring models often requires upfront capital.  For many founders, juggling full-time jobs can limit their capacity at the expense of overall customer satisfaction. Rising supply and wage costs further strain operations. Post-COVID, networking remains harder than ever.

 

Conclusion

 

There’s a lot for microbusiness entrepreneurs to think about at the start.  Key legal and financial considerations include: business structure, licensing, intellectual property, and capital sources.  These foundational elements are major determinants of business success in your early stages.  Legal and tax advisors can help you avoid early missteps and begin building success from to start.

 

For any microbusiness, it is important to be persistent and willing to lean on your community.  Whether you are navigating the world of trademarks or securing loans, being creative and resourceful is essential.  Though microbusinesses are small, they are powerful in the sense that they are truly driven by the value of hard work, passion, and determination.  If you’re thinking of starting something small, remember that your individual efforts can still make big changes.  Be a constant and curious learner to set yourself up for success. And at the end of the day, remember you don’t have to do it all alone. 

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[1] Martin Rowinski, How Small Businesses Drive The American Economy, Forbes.com (Mar. 25, 2022), https://www.forbes.com/councils/forbesbusinesscouncil/2022/03/25/how-small-businesses-drive-the-american-economy/

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[2] Stephanie Ferguson Melhorn, See the data behind America’s small businesses, U.S. Chamber of Commerce (May 20, 2024), https://www.uschamber.com/small-business/small-business-data-center

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[3] Mehdi Punjwani, Small Business Statistics in 2024, USA Today (Oct. 16, 2024), https://www.usatoday.com/money/blueprint/business/business-formation/small-business-statistics/

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[4] Taeisha Dou, The 8 Most Common Legal Issues Faced by Small Businesses, Lawpath (Feb. 5, 2021), https://lawpath.com/blog/legal-issues-faced-small-businesses#h-8-name

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[5] Restaurant Food Service Permitting & Licensing Guide, DC Dept. of Health (Apr. 1, 2026), https://doh.dc.gov/sites/default/files/dc/sites/doh/publication/attachments/DC%20Restaurant%20Regulatory%20Guide%20Sheet%20FINAL%204-1-16%20%282%29.pdf

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[6] What is a Trademark?, US Patent and Trademark Office, https://www.uspto.gov/trademarks/basics/what-trademark

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[7] What Does Copyright Law Protect?, Copyright Alliance (Feb. 18, 2025), https://copyrightalliance.org/faqs/what-can-you-copyright/

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[8] Kelly Main, Top Business Statistics of 2025, Forbes.com (Jan. 31, 2024), https://www.forbes.com/advisor/business/small-business-statistics/

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[9] A Brief History of Crowdfunding, Startups.com, https://www.startups.com/articles/history-of-crowdfunding

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[10] The History of Crowdfunding, Fundable.com, https://www.fundable.com/crowdfunding101/history-of-crowdfunding

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[11] Crowdfunding History - See How the Funding Revolution Started, Fundable.com, https://www.fundable.com/learn/resources/guides/crowdfunding/crowdfunding-history

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[12] Tim Smith, Crowdfunding: What It Is, How It Works, and Popular Websites, Investopedia.com (May 30, 2024), https://www.investopedia.com/terms/c/crowdfunding.asp.

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[13] Micro-credit and micro-finance: functional and conceptual differences, Oxfam Policy & Practice (Jan. 8, 2006), https://policy-practice.oxfam.org/resources/micro-credit-and-micro-finance-functional-and-conceptual-differences-130796/#:~:text=Microcredit%20programmes%20provide%20mainly%20one%20kind%20of%20service%2C,services%20including%20credit%2C%20savings%2C%20insurance%2C%20and%20community%20development

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[14] Rosalie Murphy, Microloans: Overview and Best Microlenders, Nerdwallet (Sep. 29, 2023), https://www.nerdwallet.com/article/small-business/microloans?msockid=205b38696c79673c2fe72b5d6d6b66f6

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[15] NON-EXTRACTIVE FINANCE: What it is and why it matters, Seed Commons, https://seedcommons.org/projects/non-extractive-finance