Micro-enterprise
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A microenterprise is a type of small business that is often unregistered and run by a poor individual. Specifically a microenterprise is defined as a business having five or fewer employees and a seed capital of not more than $35,000[citation needed]. Because microenterprises typically have no access to the commercial banking sector, they often rely on "micro-loans" or microcredit in order to be financed. Microfinance institutions often finance these small loans, particularly in the Third World. Those who found microenterprises are usually referred to as entrepreneurs.
The terms microenterprise and microbusiness have the same meaning, though traditionally when referring to a small business financed by microcredit the term microenterprise is used. Similarly when referring to a small, usually legal business that isn't financed by microcredit the term microbusiness is used.
Broadly stated, a micro-business is a business started with as little capital as possible, or less capital than would be usual for a business. More precisely, the term is often used in Australia to refer to a business with a single owner-operator, and no employees.
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[edit] Overview
Micro and Home Business Network [1], an Australian organization, defines a micro-business as one with five or less employees [2]. This definition is often used in the United States.[3] In Europe a business with less than ten employees may be officially considered a micro-business [4].
Generally speaking, governments tend to define small- and micro-businesses more broadly than colloquial uses of those terms. This article discusses micro-business in the colloquial sense.
[edit] Concept in disability recovery
Utilized as a therapeutic tool within Person centered planning Microenterprise has become valuable to persons who for many reasons cannot efficiently participate in typically rigid work environments, i.e. 9 to 5 / 40 hours per week.
Microenterprise gives persons whom have a disability flexibility to attend doctor’s appointments or treatments that normally occur in the 9–5 time frame of the day and would eventually conflict with the norm of most typical work environments.
Microenterprise presents persons with a disability, business networking avenues into the community that differ greatly from the medical or treatment mode that they may have become confined to.
Persons with a disability who own their own business, often report an increased feeling of worth or an emotional equity that becomes an enhancement to their present treatment.
[edit] Government programs
Plan for Achieving Self Support is a program offered by the United States Social Security Administration (or SSA) to encourage persons that are Supplemental Security Income (or SSI) eligible who are disabled to set aside moneys for various reasons: Training, Schooling and including funding Microenterprise as a Work Goals.
The NEIS (New Enterprise Initiative Scheme) is a government program in Australia, which assists unemployed people to start their own businesses. Although it is not specifically for micro-businesses, many if not most businesses started in this program are micro-businesses (in the senses of having limited capital, and only one person involved in the business).
[edit] Micro-Loans
Micro-Loans are a way for entrepreneurs to make small loans to those in poverty often in third world countries. The term "micro-loans" is more commonly referred to as Microcredit.
[edit] Microenterprises in the U.S.
In the United States, the microenterprise development field and its trade association, The Association of Enterprise Opportunity AEO, have defined a microenterprise as a business with five or fewer employees. Many of these businesses have no employees other than the self-employed owners. Additionally, such microenterprises generally need less than $35,000 in loan capital and do not have access to the conventional commercial banking sector. Most organizations in the field also focus their services on those microentrepreneurs who, as defined by federal government standards, are low-to-moderate income. By definition, most of these entrepreneurs are minorities, recent immigrants, women, disabled or for other reasons have special challenges that reduce their ability to access traditional credit and other services.
The microenterprise field has a twenty-year history in the United States. While the term “microenterprise” was in common use internationally by the late 1970s, it came into domestic use about a decade later. Traditionally, the business sector had been categorized into three groups: large, medium, and small. The U.S. Small Business Administration (SBA) defines a small business as having up to 500 employees. In 1991, the SBA recognized microenterprise as a separate or distinct category of business.
During the 1990s the microenterprise field grew rapidly in the United States. Starting with a small number of non-profit organizations testing developing country models, the field now has service providers in every state, a national trade association (AEO), a growing number of state-level associations and financing intermediaries, and several research and policy organizations. The Aspen Institute and FIELD (Microenterprise Fund for Innovation, Effectiveness, Learning and Dissemination) has collected data on the organizations in the field since 1992. The first directory, in 1992, listed 108 organizations that identified themselves as working in the field. By 2002 this number had grown to 650 organizations. Of these, 554 are organizations that provide direct services and 96 are support organizations that offer funding, training and technical assistance to these practitioner organizations.[1]
[edit] Microenterprises and Women in the Dominican Republic
In the Dominican Republic, a nationwide survey conducted in 1992 revealed that 330,000 micro and small enterprises created employment for 26 percent of the economically active population.[2] Furthermore, a significant portion of this is represented by women (38 percent).[3]
It is argued that the households of women are benefitted more by microenterprises because women tend to devote this income, proportionately, more to their households than do men.[4] Therefore, it is recommended that microenterprise training programs be less gender-neutral and should be diversified to address the central challenges of women's businesses.[5]
[edit] References
- ^ Elaine Edgcomb and Joyce Klein (2005). "Opening Opportunities, Building Ownership: Fulfilling the Promise of Microenterprise in the United States". http://fieldus.org/Publications/index.html#2002Dir. Retrieved 2008-09-29.
- ^ Cabal,Miguel. 1992. Microempresasy pequenas empresase n la Repdblica Dominicana: Resultadados de una encuesta nacional. Santo Domingo: Fondomicro.
- ^ Cabal,Miguel. 1992. Microempresasy pequenas empresase n la Repdblica Dominicana: Resultadados de una encuesta nacional. Santo Domingo: Fondomicro.
- ^ Grasmuck, Sherri, and Rosario Espinal. 2000. Market Success or Female Autonomy? Income, Ideology, and Empowerment among Microentrepreneurs in the Dominican Republic. Gender and Society 14 (2):231-255.
- ^ Grasmuck, Sherri, and Rosario Espinal. 2000. Market Success or Female Autonomy? Income, Ideology, and Empowerment among Microentrepreneurs in the Dominican Republic. Gender and Society 14 (2):231-255.
