What Is Microenterprise? Microenterprise Definition Explained4:17 PM
The concept of micro is used to distinguish one type of business according to monthly or annual inco...
The concept of micro is used to distinguish one type of business according to monthly or annual income, besides the size that it has. It is categorized in SMEs. Usually it raised for various reasons, including need for income to survive or to find an economic output to various skills. Also want to develop from the base, i.e it aspires to medium and / or large company.
Person able to lift one or more small micro, not only the owner, but also has direct participation in its development, i.e, it is one more worker. There are even small businesses that have no employees.
micro-enterpriseAction to establish a small business but different types of under investment and that does not usually represent a significant loss in the case of not progress. And depending on the country or state in which it is located, it will be part of what is known as "informal market" or "informal economy".
Features micro-enterpriseA small business has certain characteristics that make it be within such categories, these are:
- It has a maximum of 6 employees, only in some cases exceeds this figure up to a total of 10.
- The owner was among workers (although there are exceptions)
- It has limited turnover, i.e that does not easily allow growth.
- No significant impact on the economy, whether in your city or country.
- They are created with relative ease, depending on the country, as they can start from sales of food in the home.
Points for small businesses
- The main thing is that it becomes a source of income, being a livelihood.
- Being small has the ability to be modified in case the first does not work.
- Depending on the country, there are grants or contests that you can apply for and receive government assistance. Or, within the banks have created different types of funding for those with projects to undertake, they can access them.
- Its structure can be easily modified.
- They are job creators, though not on a large scale but it does give you the ability for someone to have a salary.
- Decisions are made quickly, as is usually the owner who holds the reins of business or a small group to reach agreements quickly.
Points against small businesses
- They have drawbacks for credit.
- Its technology equipment is often scarce, limited and undeveloped, so it requires more effort of its workers.
- Workers may lack training and expertise.
- Its production tends to be limited, in some cases for immediate consumption that meets the needs of the immediate context.
- Company workers usually do not have too many structures of hierarchy and are away from the corporate models that characterize large companies.
Types of micro
- Survival: they are created by financial need and do not have a capital base with which operating costs are managed, if not that is immediate and limited production. For example, hawker.
- Expansion: have a little more income than the last. However this is not enough money left to further develop SMEs.
- Transformation: It is more superior than the previous ones in terms of turnover is concerned, since income can form a capital and therefore are more likely to grow.