Understanding Micro-Entrepreneurship: Definition, Qualities, and Importance

Posted on Mar 9, 2025 in Business Administration and Innovation Management

Understanding Micro-Entrepreneurship

A micro-entrepreneur is an individual who starts a business by identifying unmet needs or modifying a product or service.

Identifying Micro-Entrepreneurs

Micro-entrepreneurs are easily identified by their willingness to work long hours daily in their own business, rather than working fewer hours for someone else.

The Importance of Management

It’s crucial to develop effective management strategies. Micro-entrepreneurs are individuals capable of starting a business by producing goods and services, making effective decisions, and managing their time to build a future with projects.

Qualities of a Micro-Entrepreneur

  • Motivation to act when facing a problem
  • Honest and realistic goal setting with time management
  • Ability and desire to learn
  • Listening to others and discovering opportunities
  • Thinking before acting and making informed decisions

Microenterprise: Its Evolution

The history of microenterprise in Argentina dates back to the late nineteenth and early twentieth centuries when immigrants, mostly from Europe, settled in the country. They were attracted by various proposals, with some focusing on agriculture and others on artisan trades.

Microenterprise: A Definition

A microenterprise is a small business that has the potential for economic self-development, growth, and sustainability.

Importance of Microenterprise

The proliferation of microenterprises is an important instrument of economic policy, especially in countries facing economic crises. Policies supporting microenterprise development are valuable for both underdeveloped and developed countries.

Features of Microenterprises

  • Typically have few employees (fewer than 10)
  • Have no more than two levels in their organizational hierarchy
  • Limited annual benefits
  • The area affected by the activity does not exceed 200m2

Classification of Microenterprises

According to Activity:

  • Micro Production: Transforms raw materials into finished products.
  • Micro Business: Engaged in the sale of goods and services.
  • Microenterprise Family: The capital belongs to a family group.
  • Microenterprise Organisational: Arises between two or more people.
  • Micro Sole: The owner of the capital is a single person.

Depending on the Population Involved:

  • Microenterprise Subsistence: Low level of productivity.
  • Micro Simple Accumulation: Generates sales just to overcome the costs of production.
  • Large Micro Accumulation: Ability to increase productivity.

Depending on the Number of Functions:

  • Microenterprise Single Function: Develops a single activity.
  • Micro-2 Functions: Two functions of equal importance.
  • Micro Multi Function: Incorporates several functions, making management more complicated.

According to the Newness of Production:

  • Microenterprise Production per Copy: Produces goods and services already in the market, focusing on marketing.
  • Microenterprise Innovative Production: Produces goods and services with modifications.

Advantages and Disadvantages of Microenterprise

Pros:

  • Allows more democratic distribution of income.
  • Generates employment.
  • Simplifies and reduces costs.
  • Encourages collaboration.
  • Suited for those with potential capital, space, and time.

Disadvantages:

  • Isolation.
  • Limited decision-making power.
  • Limited access to information and research.