A dermatofibroma is a common, benign lump on the skin that usually develops on the legs, but can occur anywhere on the body. The lump is firm to the touch, sometimes brown or pink in colour, and may lie on top of the skin. Often, dermatofibromas are a few millimetres to about a centimetre in size. The exact cause is not known, but they probably occur after minor damage to the skin. For example an insect bite, splinter or wound, where the body reacts with an inflammatory reaction causing this skin spot. Characteristic of a dermatofibroma is the 'dimple sign' where you pinch the side of the bump and it is pulled down into the skin.
It is always wise to consult a doctor for proper diagnosis and treatment if you discover a suspicious skin spot. A dermatofibroma does not require treatment, but sometimes they are cosmetically disturbing or cause discomfort. These skin spots can then be surgically removed, but remember that scar may be more noticeable than the original skin spot.
Example photo of a dermatofibroma