micro enterprises
A micro-enterprise (or microenterprise) is a type of small business, often registered, having five or fewer employees and requiring seed capital of not more than $35,000.[1] The term is often used in Australia to refer to a business with a single owner-operator, and having up to 20 employees. The European Union EU defines micro-enterprises as those that meet 2 of the following 3 criteria and have not failed to do so for at least 10 years: fewer than 10 employees balance sheet total below EUR 2 million turnover below EUR 2 million .[2]
The term microenterprise connotes different entities and sectors depending on the country.
Generally speaking, in developed countries, microenterprises make up the smallest end (by size) of the small business sector, whereas in developing countries, microenterprises constitute the vast majority of the small business sector—a result of the relative lack of formal sector jobs available for the poor. These microentrepreneurs operate microenterprises not by choice, but out of necessity.
Microenterprises add value to a country's economy by creating jobs, enhancing income, strengthening purchasing power, lowering costs and adding business convenience.[3]
Because microenterprises typically have little to 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.
The term microenterprise connotes different entities and sectors depending on the country.
Generally speaking, in developed countries, microenterprises make up the smallest end (by size) of the small business sector, whereas in developing countries, microenterprises constitute the vast majority of the small business sector—a result of the relative lack of formal sector jobs available for the poor. These microentrepreneurs operate microenterprises not by choice, but out of necessity.
Microenterprises add value to a country's economy by creating jobs, enhancing income, strengthening purchasing power, lowering costs and adding business convenience.[3]
Because microenterprises typically have little to 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.