What is the Meaning & Definition of micro enterprise
Small company that undertakes commercial projects
Referred to as micro-enterprise to the company's small size, which is almost always the result of the effort of a project of entrepreneurs, which even will be in charge of administration and management to the same.Qualifies them as micro because they not only are composed of few employees but also because they do not demand a large investment to operate and occupy a small place in the market. Now, this does not imply that are not profitable, but on the contrary, microenterprises with able to grow to a very important level and achieve a lot of competition with their peers in the sector.
Few employees, limited turnover but a great influence on a country's economy
Although there may be variations from country to country, a microenterprise has a maximum of ten employees generally and a limited turnover, meanwhile, another feature characteristic and differentiating with respect to larger enterprises, is that on microenterprise, almost always, the owner of the same works in it. I.e., a small business has an incidence pretty constrained in the market in which it plays, does not sell large volumes, or need a large amount of capital to operate, but on the other hand if it will dominate labor.But this limited size and little impact on volume of money does not mean that microenterprise is not important in the economic life of any country, since otherwise, have a decisive importance in the development of a nation's economy.
A niche for the most vulnerable: unemployed, housewives
In addition, microenterprises prove to be of great help for those most vulnerable in a country, since they almost always offer job opportunities for some sectors of society that are little appreciated or discriminated against, such is the case of the unemployed or housewives of houses.Many unemployed see the microenterprise ensure a profitable occupation and by the side of the housewives, can be a labour output which can even develop from your home without neglecting completely their activities of Heads of household.
By this situation that we mentioned, that microenterprises employ a population sector that can still remain outside the labour market and also the efforts involved for those who carry it out is that it is important that they receive the support from the Government through subsidies, at least until they get to take off or gain the market.
It is also relevant to the assistance received by financial institutions through loans.
The first step of the entrepreneur
Many times, microenterprise, turns out to be the first step of an entrepreneur when it comes to organizing a project and carry it forward. Once the entrepreneur formalizes the project and the company is already a fact, has the possibility of access to loans that will allow you to buy machinery, pay some expenses extras in order to generate more work and production of your company, as well as to provide social work and count on pension contributions.Micro-enterprises are popularly known as SMEs, whose abbreviation means small and medium-sized enterprises.
Disadvantages: lack of funding
Now, there are disadvantages or complications and the most important thing is identified in these cases is the lack of funding which are and which generates that such not be determined to achieve important goals in short time.This obviously infringes directly on its take-off and expansion internationally and condemnation in some way to the microenterprise to action at the local level. A performance that is good, no one can deny but an action limited by the way.