A micro business, in the NDIS context, is a small venture -- usually run by one person -- built around a skill or interest the participant already has, with the systems in place to actually sell, book, or trade. The word "micro" describes the scale, not the seriousness: a micro business is still a real business, just a small, often solo one.
What makes it a business, not a hobby
The difference between a hobby and a micro business is infrastructure. A hobby is something made or done for its own sake. A micro business has a way for people to find it, a way to pay for it, and a way to deliver it -- a website, a shop, a booking system, social accounts that are actually active. Under the NDIS, the support that turns an interest into a micro business is the capacity-building work of putting that infrastructure in place.
What it can be built around
A micro business can be built around almost anything: art, crafts, performance, a service like cleaning or pet-sitting, or a physical product. What matters is that the participant already has an interest in it, and a goal in their plan around employment or economic participation.
Who directs it
In a properly participant-directed model, the participant decides what the business is, what it is called, how it looks, and what it charges. How hands-on they are in the actual technical build -- learning to do it themselves, having it grown around their direction, or a mix of both -- depends on the participant and what they want to achieve, and is worked out together rather than assumed either way.
For a concrete example of a micro business built this way, including a live website and its first paid bookings, see the NDIS micro business support page.