micro-enterprise

Y-Negocios

2022

We explain what a micro-business is and what its main characteristics are. In addition, the advantages and disadvantages that it has.

The micro-entrepreneur is a person capable of setting up one or more small micro-businesses.

What is Microenterprise?

The concept of microenterprise is a term used to differentiate a company by the income monthly or annual that it owns, in addition to the size. It is contained within the category of SMEs.

The micro-enterprise is usually created for various reasons, including the need for income to survive or to find an economic outlet to various abilities. Also for wanting to develop from the base, that is, they aspire to medium and / or large business.

The microentrepreneur is a person Able to start one or several small micro-businesses, he is not only the owner, but also has direct participation in their development, that is, he is another worker. There are even microentrepreneurs who do not have employees.

Characteristics of the microenterprise

Microenterprises do not have a significant impact on the economy.

A small business has certain characteristics that make it fall into this category:

  • It has a maximum of 6 employees, only in some cases this figure is exceeded to a total of 10.
  • The owner is among the workers (although there are exceptions).
  • It has a limited turnover, which means that it does not easily allow growth.
  • They do not significantly affect the economy, either from your town or national.
  • They are created with relative ease, depending on the country, since they can start from the sales of food at home.

Small Business Advantages

  • The main thing is that it becomes a source of income, being a livelihood.
  • Being small, it has the facility to be modified in case the first one does not work.
  • Depending on the country, there are grants or contests to which you can apply and thus receive help from the government. Or, within banks, various types of financing have been created so that those who have Projects to undertake, they can access them.
  • His structure it can be easily modified.
  • They are generators of employment, although not on a large scale, but they do give someone the possibility of having a salary.
  • Decisions are made quickly, since it is usually the owner who has the reins of the business or a small group that reaches agreements quickly.

Disadvantages of small businesses

The production of micro-enterprises is usually limited.
  • They have problems getting credits.
  • His technology o equipment is usually scarce, limited and not very evolved, so it requires more effort from its workers.
  • Workers may lack training and specialization.
  • Its production tends to be limited, in some cases for immediate consumption that responds to the needs of the immediate context.
  • Company workers do not usually have too many hierarchical structures and are far from the corporate models that characterize large companies.

Types of microenterprises

  • Survival. They are created out of financial necessity and do not have a capital base with which the costs of operations are managed, if not that it is of immediate and limited production. For example, street vendor.
  • Expansion. They have a little more income than the previous one. However, this remaining money is not enough to further develop the SME.
  • Transformation. It is more superior than the previous ones as far as turnover is concerned, since the income allows to form a capital and therefore has greater possibilities of growth.
!-- GDPR -->