Microenterprise Success: Qualities and Classifications

Microentrepreneurs and Their Essential Qualities

A microentrepreneur is an individual who is capable of starting a business, identifying one or more unmet needs, and modifying a product or service.

Qualities of Microentrepreneurs

• Have sufficient motivation to act before a problem arises.
• Be honest and realistic when setting targets.
• Have the ability and desire to learn.
• Improve knowledge and think before making decisions and considering alternatives.
• Have the ability to overcome negative situations.

Defining the Microenterprise

A microenterprise is an economic unit; it is a small product that is likely to develop, grow, and sustain itself.

Importance of Microenterprises

The diffusion of microenterprises is an important instrument of economic policy, especially in countries facing serious economic crises. Currently, it is characterized by a system of supply of goods and services to meet the needs of the market. It must take into account that politics for microenterprise development is not only a useful tool for underdeveloped countries but also for developed ones.

Key Features

• Generally owned by a few people (no more than 10).
• Concentrated in certain branches; usually focused on production and marketing.
• Has no more than two levels of hierarchy in their organizational structures.
• Have no more than 10 employees.
• Annual benefits are limited in amount and volume.
• The area of operation does not exceed 200 m².

Classification of Microenterprises

By Activity

• Micro-productive: Dedicated to the processing of raw materials, converting them into finished products.
• Microenterprise business: Dedicated to the sale of goods and services as capital property.
• Micro family: When the owner of the capital belongs to a family group.
• Microenterprise corporate: Arises from an agreement between two or more people.
• Microenterprise of subsistence: Its most outstanding characteristic is a low level of productivity.

By Functions

• Single function: Develops a single activity.
• Two functions: Develops two functions of equal importance that complement one another.

By Novelty

• Production microenterprise (Per copy): Produces goods and services already in the market, trying to maintain a margin.
• Innovative production microenterprise: Produces goods and services and introduces modifications.

Advantages and Disadvantages

Advantages

• Allows for a more democratic distribution of income.
• Facilitates a greater transfer of market power.
• Generates employment.
• Adapts more easily to trade.
• Allows for more contact and simplifies/reduces costs.
• Encourages collaboration.
• Has the potential to deliver capital and space.

Disadvantages

• Isolation.
• Difficulties in credit management.
• Possess no power of decision in the market.
• Lack of access to information and research.
• Difficulties in inserting into a competitive market.